Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS

SCRABSTER HARBOUR ORDER CONFIRMATION BILL

STORNOWAY TRUST ORDER CONFIRMATION BILL

Considered; to be read the time tomorrow.

Oral Answers to Questions — SCOTLAND

Fishing Industry

Mr. Sproat: asked the Secretary of State for Scotland if he will make a statement on the present situation of the Scottish fishing industry.

The Under-Secretary of State for Scotland (Mr. Hugh D. Brown): The industry will benefit from the temporary subsidy arrangements and from the measures of protection against low-priced foreign imports which Norway has voluntarily adopted and which the EEC has now applied more widely. When I met representatives of the industry on 12th May I reaffirmed that the Government would pursue policies to safeguard them in relation to the overfishing of stocks, and would continue to strive for a modification of the common fisheries policy of the EEC to take account of the United Kingdom's special interest.

Mr. Sproat: Although I am grateful to the Minister for all he has done and is doing, may I ask him to accept that there continues to be the gravest concern in the industry about the renegotiation

of the EEC fisheries policies, falling prices, quotas and the break-up of the Law of the Sea Conference? Can he guarantee now that if other countries take unilateral action to extend limits we shall take immediate action? Will he accept that at next week's North East Atlantic Fisheries Commission meeting it will be the last straw for the industry if we fail to take a hard line and preserve fair quotas for the British fleet?

Mr. Brown: The hon. Gentleman has asked approximately six supplementary questions. I assure him that I appreciate the concern of the industry as expressed to me on Monday, and I can give him an assurance on his point about unilateral action by any other country. We have stated publicly that we shall be ready to take action if any other nation unilaterally extends its limits. That has been Third endorsed by the EEC. We shall be taking a hard line at the conference next week.

Mr. Grimond: May I assure the Minister that we are grateful for the meetings on the fishing industry that have been held with him and with the Minister of Agriculture, Fisheries and Food? Can he give us any indication when we may hear something definite about quotas? Secondly, has he got any further with establishing regular meetings with an authoritative body which can speak for the fishing industry?

Mr. Brown: To some extent the timing depends on the outcome of the conference next week, which is probably the most important conference—even more important than the Law of the Sea Conference, which is a longer-term matter. It would be wrong to anticipate what might come out of the conference next week. On the right hon. Gentleman's point about regular meetings with the industry, as he knows—I do not say this by way of complaint—one of the difficulties is that the fishing industry is not as well organised as it might be, particularly among the inshore fishermen. We shall give fishermen every encouragement to improve their organisation, and we are always willing to set up a more regular formal type of working party or to have regular meetings, because we recognise that there are many problems facing the industry.

Mr. Watt: Will the Minister recognise that many of the troubles of the fishing industry are due to its own indecisiveness? Will he ensure that at the NEAFC conference next week he gives his officials a definite lead to give subsidies to boats under 40 ft. long and to those engaged in shell fishing? May I ask him not to wait for somebody else to take unilateral action? It is high time that he gave the industry a lead.

Mr. Brown: It is high time the Scottish National Party had a better spokesman on fishing matters. I am not sure whether it could produce anyone better, but the hon. Member for Banff (Mr. Watt) is totally misleading the House and, indeed, the fishermen. We have already reached agreement on the basis of a voluntary scheme for subsidies for boats under 40 ft. long. The fishermen were most appreciative on Monday of the fact that, because of the difference in arrangements, we are including over 100 additional vessels in this subsidy scheme. I do not know where the hon. Gentleman gets his information from, but as usual it is wrong. We shall be taking a hard line at the conference next week. No one—certainly not the hon. Member for Banff—needs to impress on me the serious situation facing the fishing industry in Scotland, and in particular the herring industry. I am very mindful of all the responsibilities that I have for looking after the interests of the fishermen.

Fish Stocks (Conservation)

Sir John Gilmour: asked the Secretary of State for Scotland what progress has been made at the Law of the Sea Conference to conserve fish stocks and protect these stocks from being overfished in the waters round the Scottish coast.

Mr. Hugh D. Brown: The Law of the Sea Conference has not been concerned with conservation measures as such. International measures to conserve our stocks are considered in the North East Atlantic Fisheries Commission which is meeting later this month.

Sir J. Gilmour: As the Law of the Sea Conference has adjourned, and no ratifications of any changes could take place in less than about two years, does the hon. Gentleman agree that there is an urgent need for the EEC countries to negotiate with Denmark to reduce the

amount of industrial fishing? I understand that the Danes catch about 1·3 million tons of fish, of which more than 1 million tons is for industrial, not human, consumption. The matter should be negotiated straight away. It cannot be deferred.

Mr. Brown: I accept what the hon. Gentleman has said. It is disappointing, as I think I hinted after my visit to Geneva the last time I answered Questions, that the conference did not come to firm conclusions, not only on fishing but on economic zones and all the other matters. I appreciate the concern about industrial fishing, but it is always difficult to tell a friendly Power that it is pursuing policies which are not in the best interests of everyone. It is partly because of industrialised fishing by Denmark and other countries that we are in our present serious situation. We shall be raising the matter next week.

Mr. Buchanan-Smith: Does the Minister acknowledge that the fishermen have shown a very responsible attitude to conservation and quotas? We on this side of the House are encouraged by what the hon. Gentleman has said about the hard line he proposes to take at the conference next week. If bilateral discussions with other countries are necessary, will the hon. Gentleman reflect upon the point that if other countries take unilateral action—if Norway takes unilateral action, for example—as a member of the EEC we are in a relatively strong position to deal with them?

Mr. Brown: I appreciate what the hon. Gentleman has said. [An Hon. MEMBER: "Denmark is the problem."] As the hon. Member for North Angus and Mearns (Mr. Buchanan-Smith) knows, this is not a pro-EEC or anti-EEC argument, and he was not trying to suggest that it was. [Interruption.] I am not sure whether my hon. Friend the Member for Keighley (Mr. Cryer) is on my side. I cannot even hear what he is saying. We accept the policies and approach of the fishing industry as a whole towards conservation. I feel concern because the United Kingdom quota for herring, for example, is coming down from 109,000 tonnes to a maximum of 66,000 tonnes for everybody. Inevitably, serious problems face the industry. Although the industry has been responsible. I share its fears and worries about its future livelihood. That is one of the


reasons why we attach great importance to the conference next week.

Mr. Henderson: rose—

Mr. Speaker: Order. May I make an appeal to Scottish Members. It is nearly a quarter to three, and we have dealt with only two Questions. Can we go rather quicker?

Edinburgh

Mr. Robin F. Cook: asked the Secretary of State for Scotland if he will pay an official visit to Edinburgh.

The Secretary of State for Scotland (Mr. William Ross): As my hon. Friend must be aware, scarcely a week goes by without my being in Edinburgh on official business. I shall next be there on Friday.

Mr. Cook: We are grateful to my right hon. Friend for his continued presence and interest in Edinburgh. Will he be willing on one of his visits to Edinburgh to meet some of the many residents who have written to me urging support for the reform of the Scottish divorce law, particularly the two residents who later came to see me to ask whether they should wait for this House to make up its mind or move to England to qualify for a divorce there? Will he explain to them why the English Home Office is willing to take over a Private Member's Bill to stop cruelty to hares but the Scottish Office has still not found time to reform laws that cause misery to humans?

Mr. Ross: My hon. Friend spoke to me this week about a visit to Edinburgh but he did not mention divorce. I am always willing to consider the desirability or otherwise of meeting organisations. I cannot meet all those who would like me to meet them. As a Member of Parliament, I have received no letters on the subject. As Secretary of State, I have received 24 letters from individuals and four from organisations. I appreciate my hon. Friend's concern and frustration over his Private Member's Bill being obstructed, and I hope that this week the hon. Gentleman who is doing that obstruction will have a change of heart.

Rate Arrears

Lord James Douglas-Hamilton: asked the Secretary of State for Scotland

what is the latest estimate which he has of the total of rate arrears in Scotland.

The Minister of State, Scottish Office (Mr. Bruce Millan): Information is not collected on a national basis; figures for each authority are published in its annual abstract of accounts. I understand that the amount of arrears tends to be small in relation to total rates levied.

Lord Douglas-Hamilton: In view of the leniency shown by the Secretary of State and other Ministers towards councillors who did not implement the Housing (Financial Provisions) (Scotland) Act 1972, will the hon. Gentleman consider leniency also towards ratepayers who in certain areas of Scotland may face massive increases in rates, to such an extent that they may find it impossible to pay them?

Mr. Millan: I do not think that anybody will face massive increases in rates because of anything that has happened, or is likely to happen, under the Local Government (Scotland) Act, 1975.

Mr. Henderson: Does the hon. Gentleman accept that there are certain areas where people will face a massive increase in rates whether or not they were involved in what happened under the Housing (Financial Provisions) (Scotland) Act? In particular, in the Banff and Buchan area of the Grampians region, certain burghs face rate increases of more than 100 per cent. What steps has the hon. Gentleman taken to have discussions with those authorities to see whether the blow can be softened, to give people an opportunity to meet a reasonable increase but not the savage increases with which they are now faced?

Mr. Millan: We have already introduced transitional arrangements. I believe that another Question about this is to be answered a little later, a Question affecting the regional rate burden, which is much the biggest part of the total rate burden. I think it will be found, when these arrangements are taken into account, that some of the forecast increases will not happen. Incidentally, if increases result from redistribution within a region there will be corresponding reductions elsewhere.

Mr. Teddy Taylor: Will the Minister take the simple step of adding up the


figures from the various authorities so that the House may have an idea of the total rate arrears position in Scotland? Would not that be prudent? The transitional order that the hon. Gentleman has presented appears to offer no Government action to help the transition but simply transfers the burden from one area to another, so that if there is a reduction in one area the cost will be added to another within the same region.

Mr. Millan: We have already increased the rate support grant from 68 per cent. to 75 per cent. of total local authority expenditure. That is a massive increase, well beyond anything the previous Government ever achieved. In the first part of his supplementary question the hon. Gentleman was talking about a redistribution within the regions. If any changes in rate burden arise there, they come from local government reorganisation, which was put through by the previous Government. It was always expected that there would be changes in rate burdens there. We have lessened them as far as we can.
On rate arrears, I have information about the four cities up to the end of 1973–74. The figure as a whole is less than 1 per cent. The hon. Member for Edinburgh, West (Lord James Douglas-Hamilton) may be interested to know that in Edinburgh total rate arrears were then proportionately three times as high as in Dundee, four times as high as in Glasgow and 10 times as high as in Aberdeen. Perhaps the hon. Gentleman should direct his inquiries first to his own backyard.

Mental Hospital Nurses

Mr. Adam Hunter: asked the Secretary of State for Scotland what representations he has had regarding the diminishing numbers of appropriately qualified registered nurses in Scottish hospitals providing for the mentally handicapped; and if he cm give an estimate of the position likely to obtain in the next few years.

The Under-Secretary of State for Scotland (Mr. Robert Hughes): None, Sir; but I am concerned about the position. My nursing advisers and the chief area nursing officers of health boards have set up a working party which is at present looking into the manpower aspects of

mental and mental deficiency nursing and will be reporting shortly.

Mr. Hunter: Is my hon. Friend aware that the matter is becoming serious? Fewer than 50 persons commenced training for this qualification in 1974 whereas there were 100 in 1972. Is he also aware that a number of factors—the Batchelor Report is one—discourage nurses in other specialities from going into hospitals for the mentally handicapped? To solve the problem, does he not agree that a six-month course for all registered nurses working in other sectors would be better than the present 18-month course?

Mr. Hughes: I am aware that the position generally with regard to recruitment is not ideal. Until recently we managed to keep recruitment just above replacement level. As regards training, I require notice before I can give an absolute answer. Certainly I shall consider my hon. Friend's suggestions.

Galloway (Industry)

Mr. Thompson: asked the Secretary of State for Scotland if he will take steps to encourage the establishment of timber-based industries in Galloway.

Mr. Hugh D. Brown: As Galloway is in a development area, assistance to new industry setting up there is available under the Industry Acts. The Government will give sympathetic consideration to eligible projects, but I am not aware of any approaches by interested bodies.

Mr. Thompson: Will the Under-Secretary bear in mind the need for the Government to provide encouragement as well as to wait for people to ask for encouragement? Will he bear in mind that we in Galloway are no longer content to see the area treated as a kind of colony which produces raw materials to be taken away and processed elsewhere when we need the employment locally? Secondly, will he impress upon his right hon. Friend the need for us to have a speedy and safe means of transport out of Galloway? Will he therefore ask his right hon. Friend to give consent to make the A75 road into a dual carriageway?

Mr. Brown: I have enough bother looking after forestry without answering questions about roads. The hon. Gentleman made the point about the timber


being taken away from the area. It is precisely because of the present state of the plantations that there is not, perhaps, the demand locally for the processing or the industrial side. To cheer up the hon. Gentleman, I should like to draw his attention to the fact that it is estimated that in the next 25 years the forestry and industry related labour force in the area should increase from 1,200 to over 2,000. Since forestry is a long-term industry, that is an encouraging and optimistic picture in his area.

Mr. William Hamilton: As the greatest social problem in Scotland is the provision of more housing, will my hon. Friend take another look at the provision of timber-frame houses as they are not only cheaper but more quickly built? In these days when we want to increase the provision of housing and at the same time curtail public expenditure, would not this meet the dual purpose?

Mr. Brown: That is another question. The timber grown in Scotland has not been accepted so far by the building industry. While we are anxious to give every encouragement, there are practical problems which have to be overcome before the building industry will use such timber for that purpose in Scotland.

Mr. Monro: Did the Minister obtain his figures on future employment before or after the Chancellor introduced the capital transfer tax on forestry? Whilst wanting to see timber-based industries in South-West Scotland, we first need continuing supplies of timber. How will that happen in view of the Chancellor's penal taxation?

Mr. Brown: I gave up-to-date figures. The estimates are up to date. The hon. Gentleman should not exaggerate the possible fears in the minds of some people about the capital transfer tax. Concessions have already been made which I think go at least some way to meeting the citicisms.

Housing Subsidies and Rents

Mr. Lambie: asked the Secretary of State for Scotland what effect the Government's proposed reduction of £80 million at current prices in housing subsidies for the financial year 1976–77 will have on the average standard council rent in Scotland.

Mr. William Ross: The saving estimated for Scotland in the year 1976–77 is £10 million. Exchequer subsidies are not affected. The Housing Rents and Subsidies (Scotland) Act 1975 returns to local authorities the responsibility for deciding how housing expenditure after Exchequer subsidies should be met as between rentpayers and ratepayers. I expect local authorities to take a responsible view of the need to see that rent income bears a proper share of rising housing costs.

Mr. Lambie: Although my right hon. Friend is a former schoolmaster, he does not seem to be able to do much about arithmetic.

Mr. Speaker: Order. Is this a question?

Mr. Lambie: The question is coming, Mr. Speaker. Is my right hon. Friend aware that the Chancellor announced in the Budget a cutback in subsidies of £80 million in the financial year 1976–77? Taking the figure of 5·7 million dwellings on a United Kingdom basis, is my right hon. Friend aware that that will mean an increase of £14 a year on the rent of the average council dwelling? Is he further aware that in view of the Chancellor's increase in the standard rate of income tax from 33 per cent. to 35 per cent., because of tax relief and mortgage interest the average person now buying his house will receive a further subsidy? This year a person buying an average house—[HON. MEMBERS: "Too long."]—will receive an increased income tax relief of £24. Is this—

Mr. Speaker: Order, That is quite enough.

Mr. Lambie: Does my right hon. Friend consider that to be fair?

Mr. Ross: My hon. Friend was also a school teacher. His subject was geography. He was wise to stick to that subject. My hon. Friend did not correctly quote the figure which was given by the Chancellor. That figure was £65 million. I quoted a figure in respect of Scotland of £10 million. That is the right figure, which I agree in respect of that matter.
We must face the facts of inflation and that for 15 months and more we froze the rents in Scotland. However, there comes a point at which with increased costs of building, mantenance, repairs


and management, the bill must be footed. It is right to expect the local authorities to be reasonable in their adjudications as between rents and rates.

Mr. Teddy Taylor: Does the Secretary of State agree that Scotland has a desperately serious housing problem? That being the case, does he argue that Scotland should be exempt from these cuts? Can he explain why in these discussions it appears that Scotland, with a £10 million cut, is carrying more than its British share?

Mr. Ross: If the hon. Gentleman will consider the relationship between the number of local authority houses and private houses in Scotland as against elsewhere he will realise that the Scots are not carrying more than the British share. Secondly, there is no cut in relation to housing. These expenditures have nothing to do with housing subsidies. The housing subsidies will be increased. We increased them by removing the £6, which had to be faced by the local authorities. If the hon. Gentleman is interested in housing, may I draw his attention to the fact that from 1971, until the time when the Conservative Government left office, there was the most disastrous decline in house building in Scotland. That should make him keep quiet about the matter.

Mental Handicap

Mrs. Bain: asked the Secretary of State for Scotland if he has any plans to set up a National Development Group for the mentally handicapped.

Mr. Robert Hughes: The Scottish Health Service Planning Council and the Advisory Council in Social Work jointly are in process of setting up a programme group on mental disorder. I expect that this group will turn its early attention to mental handicap and therefore fulfil broadly the same rôle in Scotland as the National Development Group in England and Wares.

Mrs. Bain: I welcome the Minister's reply and I am grateful to hear it. Has he read the reports produced by the Scottish Society for the Mentally Handicapped and by the Mental Welfare Commission indicating a great need for joint co-ordination throughout Scotland to ensure that the mentally handicapped are

fully catered for in all aspects of their life?

Mr. Hughes: Yes, I have received those reports. It is too early to comment in detail on some of them. However, in 1972 a circular was issued identifying targets for the provision of hostels by local authorities. Unfortunately local authorities have not responded as quickly as we hoped. Some have reached only approximately 20 per cent. of the target for residential provision for the handicapped in the community.

Mr. Alexander Wilson: Will my hon. Friend finally use his influence on the Leader of the House or on whatever authority may have the power to institute a debate on the Melville Report, whether it be on the Floor of the House or in the Scottish Grand Committee? Is it not time that we discussed that report, which is rapidly gathering dust on the shelves in Westminster?

Mr. Hughes: My hon. Friend is wrong, at the end of his remarks, to say that the report has been gathering dust. In fact, one part of the report has been carried into legislation, albeit by Private Members. Debates on the Floor of the House or elsewhere are not matters for me, but no doubt my right hon. Friend the Lord President of the Council will read my hon. Friend's remarks in Hansard.

Islay

Mr. MacCormick: asked the Secretary of State for Scotland if he will pay an official visit to the Island of Islay.

Mr. Millan: I would refer the hon. Member to the reply given to him by my right hon. Friend the Secretary of State on 23rd April.—[Vol. 890, c. 304.]

Mr. MacCormick: Is the Minister of State aware that people in all the islands had high hopes of the results of the Government's recent survey but that those hopes have since been dashed by the great increases in fares and freight charges to the islands? Does he agree that he should eschew the pleasures of Edinburgh for one weekend and go to Islay and speak to the local people about the problems facing them?

Mr. Millan: I thought that the outcome of the recent review had been rather well


received. In fact, I had a letter thanking me for it from the hon. Gentleman's hon. Friend the Member for the Western Isles (Mr. Stewart).

Mr. Buchanan-Smith: Will the hon. Gentleman tell us why he is not prepared to help Western Ferries with the service they give to the island?

Mr. Millan: Opposition Members are always telling us to cut public expenditure. Therefore, to give subsidies to two operators for one island would be completely daft.

Rates

Mr. Teddy Taylor: asked the Secretary of State for Scotland if he will convene a meeting of representatives of the new regional and district authorities to discuss the rates which they will levy in 1975–76.

Mr. Millan: My right hon. Friend met the new Convention of Scottish Local Authorities on 25th April and further meetings with it on local government finance will be held every three or four months. These will give opportunities for discussing expenditure, grants and rates.

Mr. Taylor: Does the Minister accept that there is serious concern on the part of both business and domestic ratepayers in Scotland about the likely rates level this year? Certain local authority treasurers have said that their problems at present are like a nightmare. Will he therefore give some guidance to the people of Scotland and to local authorities about the maximum percentage increase which he, as a Minister, would regard as reasonable this year?

Mr. Millan: I think that the hon. Gentleman's questions are like a nightmare, but it is a private nightmare which is not shared by people in Scotland in the eventuality. As I have pointed out on previous occasions, one of the most effective ways of keeping rates down—I have already said in answer to an earlier question that we have given the biggest rate support grant settlement ever in the current year—is by ensuring that local authority expenditure is strictly controlled. Local authorities would be helped in that regard if they did not have constant demands by Opposition Members to increase their expenditure.

Housing Authority Rents

Mr. Canavan: asked the Secretary of State for Scotland what is the average net annual rent paid by a housing authority tenant in Scotland; and how this compares with the corresponding figure for England.

Mr. Hugh D. Brown: On the latest information available, the average annual net rent payable by local authority tenants in Scotland is £110 and in England £155.

Mr. Canavan: Will my hon. Friend bear in mind that this will be the last occasion for Scottish Questions before the present Scottish housing authorities go out of existence at the weekend? Will he take this opportunity of thanking all the Labour councillors who, over the years, have managed to keep rents in Scotland at such a reasonable level? Will he urge the new district councils which are taking over to follow in the same traditions and to resist any demands by Tory and SNP councillors, some of whom want to impose the maximum increases? Will he also bear in mind and possibly reconsider the proposal to raise the rents of Scottish Special Housing Association houses by 50p per week, because many of the tenants feel a sense of injustice as they already have to pay much higher rents than council house tenants living in the same areas?

Mr. Brown: My hon. Friend raises some wide questions. I pay tribute to the many people in local government whose authorities, as we know them, are going out of existence from tomorrow.
It is a little misleading to leave the impression that any housing authority in future will be able to avoid reasonable rent increases, bearing in mind the increased costs of building and the number of houses still required to be built. However, to some extent I share my hon. Friend's concern about inequalities in rents between one authority and another. Within the context of reorganisation, perhaps a fresh look can be taken at equalising rents between different authorities.

Mr. Rifkind: Does the Minister realise that, as a result of Labour policies, Scotland now has the lowest rate of owner-occupation of any country this side of the Iron Curtain? Will the Government


explain what they intend to do about it? In particular, will they now give encouragement to allow council house tenants who wish to do so to become the owners of the homes in which they live?

Mr. Brown: The most practical contribution to increase the percentage of owner-occupation—we are committed to that—is, as we have already done, to assist building societies, to give encouragement to the private sector to build more houses and to ensure that the finance is available particularly for young people who want to buy houses.

Mr. Welsh: When the Secretary of State compares Scottish and English housing, will he also look at the Government's English housing initiatives? Over the past few months the Secretary of State has said "No" to a Scottish environmental board, "No" to a Scottish construction industry liaison group and "No" to Scottish participation in the Building Societies Association Liaison Group. Will he stop saying "No" and start saying "Yes" to decent Scottish housing?

Hon. Members: No.

Mr. Brown: Hon. Members say that the answer is "No". I am not sure what the answer should be, because I do not think that I properly understood the question, which was so involved. I can only repeat that there is nothing to stop the maximum number of houses being built in Scotland by either public authorities or private enterprise. We have taken steps in both directions to encourage both sections of the industry.

Mr. Sillars: Does my hon. Friend agree that the main obstacle to building both private and public sector houses in Scotland is the rate of interest charged to both the public and the private sectors? As well as increases in material and labour costs, the greatest burden now and in future is the tax exacted by the moneylender. Is it not time that the Socialist Administration produced money for local authorities at a far cheaper interest rate than is being done at present?

Mr. Brown: Yes, but I am afraid that my hon. Friend will have to face the hard facts of life. We are still living in a moneylending society. It is possible to provide cheaper money for local authori-

ties, but that is merely another form of subsidy in present circumstances. The solution seems to be to get the economy on the right lines and to get interest rates generally down.

Mr. Galbraith: Is not the real reason for the difference between rents in England and Scotland that far too great a proportion of the rents is paid by rates in Scotland? Should not that be readjusted?

Mr. Brown: We have given local authorities freedom. We do not just talk about it; we do something about it. We are confident that, by and large, local authorities will act responsibly. This is a matter for the judgment of local electors. We believe in democracy. If one authority over-subsidises rents from rates, it is a matter about which local electors can express their opinion.

Disabled Persons

Mr. Alexander Wilson: asked the Secretary of State for Scotland how many Scottish local authorities have a list of disabled persons; and if he will name them.

Mr. Robert Hughes: Almost all the local authorities in Scotland have indicated that they have, or are in the process of preparing, a list. The authorities and their present methods of obtaining information were given in the reply to my hon. Friend the Member for Eccles (Mr. Carter-Jones) on 18th March.—[Vol. 888, c. 405–7.]

Mr. Wilson: Does my hon. Friend accept that to me that is a very disappointing reply? Is it not about time that the Government instructed local authorities to follow the example of, for instance, Motherwell and Wishaw Town Council, which is incurring considerable expense and time in advertising on television and in the local Press for a register to be compiled of every disabled person, whether mentally or physically handicapped? Will the administration, in which I have confidence, now instruct the new local councils from tomorrow that a register should and must be compiled as soon as possible?

Mr. Hughes: We shall do everything possible to encourage local authorities who do not have such a list to prepare


one. The new authorities begin their operations on 16th May. As well as discussing their development plans for social work services, we shall certainly be discussing with them the preparation of a list of disabled persons.

Dr. Bray: Is my hon. Friend aware that there is some concern that the personal quality of social work which has been established in places like Motherwell and Wishaw could be somewhat diluted and become anonymous in the vast regional administrations? Will he ensure that the personal quality of the service is not lost?

Mr. Hughes: I think that provision was made for this in the Local Government (Scotland) Act. The Strathclyde Region, under that Act, has to produce a scheme for social work. I have seen such a scheme prepared. I am concerned to see that in these bigger authorities the personal attachment to the work is not lost, because we are dealing with a very personal social service.

Land Ownership

Mr. Sillars: asked the Secretary of State for Scotland what representations he has received from political parties about the question of land ownership and the registration of land holdings.

The Under-Secretary of State for Scotland (Mr. Harry Ewing): None, Sir.

Mr. Sillars: Is my hon. Friend aware that the Labour Party at its conference at Aberdeen had a certain opinion on these matters? Does he recall the brilliant retort of the Secretary of State to the SNP slogan on oil that it is "Scotland's soil"? Can he ask our right hon. Friend how he can be so sure of his facts without a register of land holdings?

Mr. Ewing: As my hon. Friend knows, I was present at the Labour Party Conference and I am very much aware of what it decided. We wait with interest to see what submission we receive from the Scottish Council of the Labour Party following that conference, and no doubt the Secretary of State will be able to explain the quotation he used during the debate.

Mr. MacCormick: Does the hon. Gentleman appreciate that one aspect of

land ownership which could be reformed quickly is crofting and crofting tenure?

Mr. Ewing: That is an entirely different question, as the hon. Member will appreciate. He should put down a Question to that effect if he wants an answer to it.

Public Expenditure

Mr. Alexander Fletcher: asked the Secretary of State for Scotland if he will detail the services affected by the 1976–77 public expenditure cuts.

Mr. William Ross: I refer the hon. Member to my reply on 28th April to the hon. Member for Glasgow, Cathcart (Mr. Taylor).—[Vol. 891, c. 47.]

Mr. Fletcher: Is the Secretary of State aware that some of us on this side accept the need for cuts in public expenditure but that we find it difficult to reconcile that with the claims being made by Labour Members about the £300 million which will be spent by the Scottish Development Agency? Does he accept that on his side the left hand does not know what the right hand is doing, or is this further evidence of the bogus statement by the Chancellor during the last election that inflation would be held at 8 per cent.?

Mr. Ross: The hon. Member should appreciate exactly what the Chancellor said and what he did in the Budget. He certainly sought to restrain the rise in public expenditure. This is not an absolute cut: it is restraining the projected rise. Secondly, I remember his saying that we had to make available the necessary money to produce industrial development because our future depended on it. Therefore, he made available further moneys in respect of training and retraining of men. No one took objection to that. The same applies to the growth of new industry and to expansion within Scotland. We have to provide more money for that end, and that we are doing, without apology.

Mr. Crawford: Is the Secretary of State aware that we in the Scottish National Party do not accept the public expenditure cuts in Scotland? Is he happy with those cuts? Does he not agree that Scotland can sustain economic expansion and that we do not need inflation?

Mr. Ross: The hon. Member should appreciate exactly what the Budget makes available to Scotland. We make available moneys according to need. That is why Scotland has had more than its share in the past. I hope that the hon. Gentleman will adopt a much more balanced outlook towards the United Kingdom and a little less selfish one.

Mr. Teddy Taylor: Where will the £10 million cut in housing fall? is the right hon. Gentleman seriously saying that he accepted a larger cut for Scotland simply because we had more council housing?

Mr. Ross: The hon. Member is getting as muddled as ever. We know how the Tories cut housing expenditure: they simply stopped building houses.

Mr. Taylor: Answer the question.

Mr. Ross: The question was how we would achieve it. Public expenditure is not only national but also local. Local expenditure on certain housing matters has been causing the hon. Gentleman concern. So savings can be made there.

Mr. Taylor: Where?

Mr. Ross: I have already told the hon. Gentleman, in respect of rents. May I remind him what his Government did? In January 1974 they stopped altogether any further expenditure on new schemes for improving local authority houses. That is one way of saving money. There are many other ways. We are examining them, but I am not deceiving people about how I expect local authorities to deal with the question of rents.

Public Buildings and Installations (Security)

Mr. Fairbairn: asked the Secretary of State for Scotland if he is satisfied with the security of public buildings and installations in Scotland.

Mr. Harry Ewing: Responsibility for the security of public buildings, as of private property, normally lies with the owner or occupier. The police are always ready to assist and in consultation with those concerned with premises subject to particular threats have prepared appropriate contingency plans. Suitable arrangements have been made for the security of those buildings for which I am responsible.

Mr. Fairbairn: I appreciate that there are matters presently sub judice. In view of the regretted spread to Scotland of robbery and violence for the attainment of political objectives, which inevitably accompanies nationalism, will the hon. Gentleman make plans for the protection of life, limb and property in view of this infectious manifestation?

Mr. Ewing: As I explained, we are satisfied that the contingency plans which have already been made for buildings which are subjected to particular potential threats are adequate to meet any threat that anyone may attempt to carry out. Therefore, while I recognise the concern on this point, we consider that the present plans are adequate for the situation we face.

Mr. Sillars: Does my hon. Friend agree that it is very dangerous to exaggerate the supposed latent potential for political violence in Scottish society? Will he take this opportunity to tell everyone in Scotland that there is absolutely no need for anyone to turn to violent action for political ends, because there is an abundance of democratic avenues open to everyone, of every political view, in Scotland?

Mr. Ewing: I am most anxious that nothing said in the House or elsewhere should inflame a potentially highly inflammable situation. My hon. Friend's message is admirable, that there is no need for anyone of any connection or persuasion to resort to violence to achieve political ends. There are adequate democratic means to achieve them.

Mr. Gordon Wilson: Does the hon. Gentleman agree with what I think most citizens would accept, that crime is objectionable whether it is political or nonpolitical, and that the best way of beating crime of any sort is to ensure that we have a strong police force? Will he therefore accept that there is a need to increase the remuneration of the police so as to recruit more people to the forces of law and order?

Mr. Ewing: As I said, I am most anxious not to say anything that would inflame any inflammable situation. That applies equally to police pay as to the subject of the original Question.

Mr. Sproat: Does the Minister agree that the Government's measures for the


protection of oil installations, whether onshore or offshore, are at the moment almost ludicrously inadequate, and that this applies most strongly to onshore installations because they are more vulnerable? Will he therefore consider setting up a committee to make use of the considerable expertise which already exists in Scotland to assess properly the threat to onshore installations and to advise how best they may be protected?

Mr. Ewing: The protection of onshore installations is the responsibility of my Department, through the police. The protection of offshore installations is the responsibility of the Department of Trade. I am satisfied that, so far as my Department is concerned, the protection of onshore establishments is adequately covered, although obviously we keep the matter under continuous review.

European Community Membership

Mr. Rifkind: asked the Secretary of State for Scotland what is his latest estimate of the effect on the Scottish economy of British withdrawal from the EEC.

Mr. Millan: The Government's view remains as I described it in my reply to the hon. Member on 7th April.—[Vol. 889, c. 349.]

Mr. Rifkind: Will the Minister indicate why the Secretary of State has not himself chosen to reply to my Question as he promised he would if I put one down? Will he also indicate how the Government reconcile the statement by the Secretary of State for Scotland that the European Community is a monstrous bureaucracy with the simple fact that the Scottish Office employs more civil servants than the European Commission?

Mr. Millan: The Scottish Office does a lot of things that the European Commission does not. It runs the police and prison services, for example, and so far as I know we do not yet have a Common Market prison service. Some of these comparisons are, therefore, perhaps a little misleading. My right hon. Friend said that if the hon. Gentleman put down a Question he would get an answer. He put down a Question and he has had an answer.

Glasgow

Mr. McElhone: asked the Secretary of State for Scotland when he next plans to visit Glasgow.

Mr. William Ross: I have an official engagement in Glasgow on 6th June.

Mr. McElhone: Is my right hon. Friend aware that if he visits Glasgow he will find that the recent weekend speech by the hon. Member for Aberdeenshire, East (Mr. Henderson), which suggested that we should all join the Scottish National Party to bring prosperity to Scotland, is being treated with a great deal of amusement by my constituents? Does he agree that any party which is rejected by the STUC and by practically every trade union in Scotland, and a party which is following a dishonest line over the Common Market in that it wants Britain out and Scotland in, is not acceptable to the Scottish people? Does he further accept that any party which disagrees with public ownership of North Sea oil can do nothing for the prosperity of the Scottish people?

Mr. Ross: I completely agree with all that my hon. Friend has said.

Mr. Henderson: Would the right hon. Gentleman agree that it would do him and his hon. Friend the world of good if they read my speeches which are made at weekends or at any other time?

Mr. Ross: I would not even invite the hon. Gentleman to read his own speeches.

Oral Answers to Questions — GLASGOW

Mr. Teddy Taylor: asked the Lord Advocate if he will pay an official visit to Glasgow.

The Lord Advocate (Mr. Ronald King Murray): I have no plans at present to make an official visit to Glasgow.

Mr. Taylor: Is the Lord Advocate aware that we are very proud of our burgh courts in Glasgow? Is it his intention or hope that more stipendiaries will be employed in the new district courts in Glasgow and throughout Scotland? Has he comparable figures for the waiting times for burgh courts in Edinburgh and Glasgow respectively, bearing in mind


that Glasgow has stipendiaries and Edinburgh does not?

The Lord Advocate: Stipendiaries are not a matter for the Lord Advocate. As for the second part of the hon. Gentleman's question, trials are now being arranged for January 1976 in Glasgow, whereas in Edinburgh they are being arranged for as far forward as May 1976. It follows that the delay in Edinburgh is much greater than the delay in Glasgow. However, I can assure the hon. Member that when I assume the responsibility for prosecutions in these courts on Friday, I shall try to find out the position in relation to all district courts and where there is a backlog make appropriate representations to the local authority concerned for more court sittings.

Mr. Robin F. Cook: In Edinburgh there has been much concern that if stipendiary magistrates were appointed work would be transferred from the local sheriff court to the magistrates' court. Is my right hon. and learned Friend in a position to give guidance to Edinburgh Council that such an appointment would not result in an intolerable increase of work for the magistrates' court?

The Lord Advocate: That is not a question for me. My hon. Friend will get a reply to it if he puts it down to the appropriate Minister. The original Question concerned an official visit to Glasgow. I do not think that Edinburgh is in Glasgow yet.

Oral Answers to Questions — SCOTTISH APPEAL COURTS

Mr. Canavan: asked the Lord Advocate whether he is satisfied with the legal service offered to clients in the appeal courts.

The Lord Advocate: On the whole, the present legal services work reasonably well.

Mr. Canavan: Does not my right hon. and learned Friend consider it a bit unfair that a client should hire a lawyer to deal with his appeal and subsequently find that the lawyer, without consulting the client, has abandoned the appeal and then has the cheek to send the client a bill for f15 expenses, as happened in a case I recently reported to my right hon. and learned Friend? Why is the

legal profession in Scotland allowed to behave in such a disgraceful manner?

The Lord Advocate: My hon. Friend has had a reply to the letter he wrote to me on this subject and I think I have dealt with all the matters he raised therein in so far as they are matters for me. Matters of legal advice given to clients must, of course, be taken up with the legal advisers themselves. In so far as a client is dissatisfied with the legal advice he is given or the fee he is charged for it, that is a matter to be taken up with the appropriate professional body, either the Law Society of Scotland or the Faculty of Advocates.

Mr. Rifkind: Will the right hon. and learned Gentleman seek to end speculation that the recent decision of the English Appeal Court concerning the law on rape has no relevance for the position in Scotland, and that the Government have no intention of changing the Scottish law in this respect?

The Lord Advocate: I can confirm the first part of the question. On the second part, if there is a review of the law on sexual offences generally it is appropriate that Scotland also should take account of that review.

Oral Answers to Questions — SCOTTISH DIVORCE LAW

Mr. Sproat: asked the Lord Advocate what representations he has received from individual members of the legal profession, or associations of lawyers in Scotland, in support of the present Scottish divorce laws.

The Lord Advocate: I have not myself received any such representations.

Mr. Sproat: Does the Lord Advocate agree that it would appear that the entire legal profession in Scotland, a vast section of the public, Members of all parties in this House and the right hon. and learned Gentleman himself are all agreed that Scottish divorce law should be reformed? In these overwhelming circumstances, why are the Government digging in their heels and refusing to have a debate on this matter? [Interruption.] This is a Government responsibility. Will the right hon. and learned Gentleman undertake to press his right hon. Friends most strongly to have a debate in the


Scottish Grand Committee before the Summer Recess?

The Lord Advocate: It is incorrect for the hon. Gentleman to say that the Government are digging in their heels. The Government have been sympathetic to the possibility of legislation on this matter. The hon. Member should consult his hon. Friend the Member for Glasgow, Hillhead (Mr. Galbraith), who digs in his heels and opposes these measures whenever they come forward in the House.

Mr. McElhone: May I suggest that in any new legislation which my right hon. and learned Friend might propose for dealing with a breakdown of marriage or for improving the divorce law, he should give the same priority to assisting the preservation of marriage in Scotland?

The Lord Advocate: I am glad to give that assurance without reservation.

Mr. Galbraith: Is the right hon. and learned Gentleman justified in attacking me? Is not the Government's failure that they build without a foundation? Does the Lord Advocate believe in trying to change the law without a proper debate on Second Reading of a new Bill?

The Lord Advocate: The hon. Member has every right to object to private legislation if he thinks it correct to do so, but he must surely accept the criticism which his stand would naturally attract.

Oral Answers to Questions — CROWN OFFICE STAFF

Mr. Fairbairn: asked the Lord Advocate how many legally qualified staff work in the Crown Office.

The Lord Advocate: There are seven Crown counsel, employed on a part-time basis, and six full-time civil servants who are legally qualified.

Mr. Fairbairn: I appreciate that the Lord Advocate earns every penny of his salary, but will he say what anticipated enlargement of his staff will be required when he assumes his new duties under the District Courts (Scotland) Act this week?

The Lord Advocate: The hon. and learned Gentleman will appreciate that my answer related to the Question, which sought to discover how many

legally qualified staff work in the Crown Office. That does not include the Lord Advocate and the Solicitor-General for Scotland. However, I am happy to reassure the hon. and learned Gentleman that in taking account of the needs of prosecution in the district courts the staffing of the Crown Office was one of the factors considered.

Mr. Gordon Wilson: On the eve of the visit of the American Ambassador to Edinburgh this week, and in view of the tremendous disquiet which exists over the conduct of local government in Scotland, will the Lord Advocate consider appointing a special prosecutor along the lines of the one appointed in the Watergate case in the United States to look into the activities in local government and its relationship with certain contracting industries?

The Lord Advocate: I am happy to say that visits of ambassadors are not matters for the Lord Advocate.

Oral Answers to Questions — EUROPEAN COMMUNITY LAW OFFICERS

Mr. Rifkind: asked the Lord Advocate when he next intends to meet the Law Officers of other member Governments of the EEC.

The Lord Advocate: I have no plans to meet the Law Officers of other member Governments of the EEC in the immediate future—at least in a Community context. However, I am proposing to attend a meeting of European Ministers of Justice which the Council of Europe is holding at Strasbourg on 22nd May, and I hope on that occasion to renew some agreeable and useful contacts with Ministers of Justice from other EEC countries.

Mr. Rifkind: Will the Lord Advocate end his mysterious silence on European Community matters? Will he give the House and the people of Scotland an assurance that his Department is quite satisfied that neither Scottish law nor Scottish legal institutions will be in any way endangered by continued British membership of the Community?

The Lord Advocate: I am happy to confirm what has been stated previously by Ministers from this Dispatch Box, that


continued membership of the EEC does not imply any threat to the domestic law of Scotland. It will undoubtedly continue except in so far as it is affected by the limited sphere of Community law.
The hon. Gentleman seems to be suggesting that I am in some way secretive on the general aspect of the EEC. I would have thought that I was being secretive in a perfectly proper way. I have the privilege of answering Questions, not in order to parade my personal convictions but in order to answer for the Government.

FERRANTI LIMITED

The Secretary of State for Industry (Mr. Anthony Wedgwood Benn): With permission, Mr. Speaker, I should like to make a statement.
In August 1974 Ferranti Limited sought the Government's help to overcome the company's financial difficulties. As the House knows, the Government gave a guarantee under Section 7 of the Industry Act 1972 to the company's principal banker of additional overdraft facilities. Adequate finance was thus made available for the continuance of the company's business while solutions to its difficulties were considered.
Ferranti Limited is an important company. It has developed valuable technological capabilities in a number of areas, it is an important supplier of defence equipment, it has gained valuable exports, and it provides employment, mostly in assisted areas, including Scotland. Furthermore, with changes in financial and management structure, there are good prospects for the viability of the company. With the objectives of establishing a viable company, thus preserving emloyment, and maintaining a British capability in those areas where Ferranti Limited has a high reputation, the Government have agreed to provide financial support.
After constructive tripartite discussions with representatives of the work force and following negotiations by Sir Don Ryder with the major shareholders of Ferranti Limited, arrangements for the Government's financial support have been settled.
Details of the arrangements will be included in the Official Report but their

broad effect is that the Government will subscribe a total of £15 million of new capital, partly in voting equity, partly non-voting, and partly in loan form at a commercial rate of interest. The Government will have 62½ per cent. of the total equity, and 50 per cent. of the votes, which is more than enough to give the Government effective control over the company.
There are provisions in certain circumstances for part of the Government's non-voting shares to be made available if the company is able to arrange a public marketing of its shares. At that time or at the latest on 1st October 1978, all the non-voting shares will acquire voting rights. The Government's voting power could not in any circumstances tall below 50 per cent. and might well increase.
Some changes will be made in the management of the company. A new chief executive will be appointed, as will a finance director, both to be approved by the Government, which will also have the right to appoint some other directors.
The Government believe that these arangements represent the soundest basis for an agreement between the Government and the shareholders to give Ferranti a viable future and to safeguard the interests of the work force. The new management would be required to prepare plans for the future of the company, including an assessment of the prospects for the transformer division which has been making heavy losses, but no decision to separate the transformer division from the company will be made without Government approval.
I should add that, in accordance with our approach to industrial policy, we shall be arranging for a planning agreement with Ferranti and that the Government will encourage the development of industrial democracy within the firm on an agreed basis.
These arrangements should provide the opportunity for the company to recover from its present difficulties and make a full contribution to the national economy.

Mr. Heseltine: I appreciate that the House does not have before it the Heads of Agreement between Ferranti Limited and the Government which the Secretary of State has kindly provided for me.


May I therefore ask, in the light not only of the statement but of the Heads of Agreement which the House will want to study, whether the right hon. Gentleman would agree that this is an unnecessary and expensive deal that he has concluded? Does he agree that, first, it contains no indication about how profitability is to be achieved, nor does it give any indication of a commitment from the unions that they will help in achieving that profitability?
Second, is the right hon. Gentleman not aware that the nub of the argument lies in Section 11 of the Heads of Agreement wherein it is said that if the company wishes to float, the Government will take over an unending commitment to the losses of the transformer business at the date of flotation? While the Government are prepared to take over the liability for the losses of that company in the sort or medium-term future, is it not the case that if the Government took over the losses now there would be no need for the £15 million of taxpayers' money which is embodied in the statement we have heard today?
Third, is the right hon. Gentleman aware that while Section 7(4) of the Industry Act 1972, which must have been the basis of the legislative backing for his announcement, does not allow him to give such aid to a company unless there is no practical alternative means of helping that company, Section 11 of the Heads of Agreement proves that there is an alternative method of helping the company in partnership with the private sector at a much greater—[Laughter]—lower cost to the taxpayer? Fourth, will the right hon. Gentleman confirm that permission from Brussels was either not necesssary or has been sought and obtained?

Mr. Benn: I do not accept the first point made by the hon. Gentleman. As for the prospects for viability, work is needed to give viability to this company which has been managed without commercial success. Attention needs to be given to its problems. I believe that the prospects are good.
Turning to the point about the commitments by those who work in the company, our view is that these should best be tackled on a tripartite basis. Over the

past few months we have achieved a notable contribution from those who work at Ferranti. I would not regard any commitment as being required solely from one side.
There are possibilities of dealing with the losses that have been accumulating over a period in the transformer division. I would be sorry to see another example of manufacturing capacity chopped out in the interests of short-term profitability, which is the broad view of the Opposition, made clear on many occasions.
Section 7 of the 1972 Industry Act, which was legislation enacted by the Conservative Government, did not even require me to report this matter to the House. The degree of accountability we have tried to breathe into that measure was reflected by my statement.
There was, of course, the alternative of a receivership. We took the view that a receivership at a time when the company's prospects depended on confidence in its continuing operations, and with employment at stake, would not be the right course for us to adopt.
Dealing with the question about the provisions under the Treaty of Rome, the Treaty of Accession and the European Communities Act, I understand that in this case, although we are today telling the Commission of the statement I am making, we are operating, as I understand it, within guidelines already approved. Therefore I am authorised to make the statement in this way.

Mr. James Lamond: Will my right hon. Friend accept the congratulations of hundreds of my constituents whose jobs are involved and the congratulations of thousands of members of the AUEW, which sponsors me in Parliament? Is he aware that those workers realise that it is only through actions of this kind that the Labour Government are able to safeguard them from the worst economic ills of the capitalist system? Will my right hon. Friend also bear in mind that it is important to ensure that the transformer division remains part of the industry? Although at the moment it is making a loss, in the past many of the experiments that were carried out by the firm were financed by the profits from the transformer division. Will my right hon. Friend accept that my constituents have been watching with interest the reaction


of the Conservative Party, and will no doubt in future act according to what has taken place in the House today?

Mr. Benn: I am grateful to my hon. Friend for what he has said. My hon. Friend faithfully reflects the views of workers in Ferranti and workers throughout the country who are confronted, through no fault of their own, with a threat to their employment. I believe that the policy of Her Majesty's Government receives warm support throughout industry. Unlike the hon. Member for Henley (Mr. Heseltine), whose first remedy is always to sack them, we believe in re-equipping and improving manufacturing capacity as far as we can.
Although the Scots have very often heard it argued that their own plants are non-viable whereas the English plants might be viable, in this case the viability of the Scottish operations is very clear. I am grateful to Scottish workers for recognising that they should not impose on the English workers in the transformer division the penal sanctions that in the past other Governments have applied to unviable Scottish plants.

Mr. Cyril Smith: Will the right hon. Gentleman take note of the fact that my Liberal colleagues and I take the view that the electronics industry is a growth industry that should be encouraged, and that basically we welcome his statement? But will the right hon. Gentleman say whether the non-transformer divisions of the company have made a profit? If so, and if those profits are greater than the losses of the transformer division, will the right hon. Gentleman say what the company's profit forecasts are for the future? Finally, will the right hon. Gentleman give us the total global sum promised by the Government to industries in Great Britain in order to get them out of financial difficulties?

Mr. Benn: I am glad that the hon. Gentleman's considerable weight is placed behind our policy in this matter. I cannot answer his questions specifically. It would take some time to provide answers to them. However, I shall seek out such answers as can be given without damaging the interests of the company, and I shall let him know. The amount of public money that was running into private industry when the Conservatives

were in power was about £2 million a day. We take the view that where support on this scale is required it is right that the injection of money should be followed by public equity and accountability appropriate to what has been put in.

Mr. Alexander Fletcher: Will the right hon. Gentleman tell the House who advised him to keep together the transformer division, which is loss-making, and the profitable Scottish operations? Will the right hon. Gentleman tell the House whether this take-over will be handled by the proposed National Enterprise Board or the proposed Scottish Development Authority?

Mr. Benn: As regards advice, as the hon. Gentleman will know, I have tried in all these cases to bring together management, the work force and Government to examine collectively the problems of companies that run into difficulties and not to operate only with the managements on the basis of restoring them to short-term profitability regardless of export and employment consequences. I have attended and participated in three tripartite meetings. Many of the proposals that have come forward have emerged from those meetings. The negotiations were undertaken on the Government's behalf by Sir Don Ryder. I should like to pay tribute to Sir Don's work in the difficult negotiations which have taken place. It follows that when the Industry Bill is enacted the shares that we acquire in the company will, in the normal course of expectations, be transferred to the National Enterprise Board.

Mr. Robin F. Cook: Is my right hon. Friend aware that last week the Edinburgh Workers' Council, which represents approximately 5,000 production workers and salaried staffs, unanimously agreed to record its appreciation of the skill with which he has handled this problem and its support for Government intervention? Will my right hon. Friend assure the House that if there are to be changes in the management structure of the company the changes will be sensitive to the need to preserve the considerable autonomy that is at present enjoyed by the Scottish group of factories?

Mr. Benn: I am grateful to my hon. Friend for what he has said, but my part


in this matter has been a small one because the work has been done by the people who work for Ferranti. It is not my wish or desire to seek to impose solutions on companies which probably know better than most what is wrong with them. Probably their advice is the best advice to be sought. However, we have had to take the decision ourselves as to the measure, nature and character of Government support.
As regards autonomy, there has been a general view expressed within the company, which I share, that decisions should be taken nearest the point where they are to be applied. That is in line with our thinking both about industrial democracy and management thinking. It is also in line with what both management and workers think. Having said that, I repeat my gratitude to the Scottish workers for not having sought to make safer their own survival at the expense of workers at Oldham and elsewhere.

Mr. Warren: Will the right hon. Gentleman tell us what steps he took to encourage other British companies in simililar lines of business to rescue Ferranti rather than to burden the taxpayer with the whole of the cost as it is now to be put on them?

Mr. Benn: There were discussions of one kind or another which I would not think it right to reveal to the House, as these matters have to be conducted with a reasonable degree of discretion. However, I say in all sincerity to the hon. Gentleman that, having had some experience in an earlier manifestation as Minister of Technology, the idea that somehow a merger is the answer to the problems of a company does not now seem to be as sensible as at one time it seemed, when really re-equipping, better management or better industrial relations are required. It is necessary to look into the heart of a company to find out why things have gone wrong and to see how they can be put right. That must be done on the basis of discussions with those involved, in the hope that out of them will come the will to implement what needs to be done.

Mr. Palmer: Does my right hon. Friend think that there is a case for the rationalisation of transformer manufac-

turing capacity in general in this country? When the National Enterprise Board is set up, will Sir Don Ryder be looking into that possibility?

Mr. Benn: I am not ruling out the possibility that there may be some improvement or strengthening of the industrial structure. These matters are in part dependent upon the level of domestic ordering and the prospect of export orders. What I would be opposed to—I know that my hon. Friend would be opposed to this as well—would be to use a difficulty in a single company as an excuse to rationalise to a lower level of capacity, so that when the upturn comes this country, as has so often happened in the past, will not have the necessary capacity.

Mr. Churchill: Is it not the clear implication of the Secretary of State's statement that the company was at fault in not enforcing redundancies in the transformer division? What estimate has the right hon. Gentleman made of the numbers of redundancies required to make the company profitable?

Mr. Benn: The passion for redundancies on the part of secure and well-paid people, such as the hon. Gentleman, throughout our society, including ex-Cabinet Ministers on the Opposition Benches and even present Cabinet Ministers, indicates that underlying their apparent claim for efficiency there lies a hatred of working people that is reflected by what they say.

Rear-Admiral Morgan-Giles: Shame!

Mr. Powell: Will the right hon. Gentleman explain—

Rear-Admiral Morgan-Giles: Shame!

Mr. Powell: Will the right hon. Gentleman—

Rear-Admiral Morgan-Giles: Shame!

Mr. Speaker: Order. The hon. and gallant Gentleman must restrain himself.

Mr. Powell: Now that HMS "Belfast" has finished firing, may I ask the right hon. Gentleman to explain to the official Opposition that they can neither defend nor expound capitalist enterprise until they are prepared to proclaim that there is no substitute for bankruptcy?

Mr. Benn: I do not want to intervene in an historic intellectual argument that has been going on between the right hon. Gentleman and his former colleagues, or to complicate the prospect of his return to the fold when they have seen the error of their ways, but the right hon. Gentleman is certainly right in saying that the Conservative Government in 1972 entirely reversed the Selsdon Park policy based upon the idea that bankruptcy was the right course for capitalist enterprise that failed. The right hon. Member for Knutsford (Mr. Davies), who advocated that policy, is leaning anxiously forward to confirm the wisdom of his own late conversion to a different course of action. The Conservatives abandoned that policy. They gave an incoming Labour Government an instrument of intervention that I have been glad to use until our new instruments are available, and all that is revealed is that their attachment to bankruptcy has extended to their own policy.

Sir Anthony Royle: On a point of order, Mr. Speaker.

Mr. Speaker: Order. I gather that the hon. Gentleman wishes to raise a point of order. I should prefer him to do so at the end of questions on this statement.

Sir Anthony Royle: I should like to raise the point of order now, Mr. Speaker, because it so much affects what the right hon. Gentleman said in answer to a previous question which I think will worry many hon. Members who heard it. I shall be grateful for your advice, Mr. Speaker. The Secretary of State included his colleagues who are members of the Cabinet in those Members of the House who were in favour of redundancies. I should be grateful if the Secretary of State would clarify that remark.

Mr. Speaker: As I have said before, fortunately or unfortunately I have no responsibility for what the right hon. Gentleman says, provided that he uses parliamentary language. Mr. Dalyell.

Mr. Benn: Even if it is out of order, may I say that if in the heat of the moment I appeared to give the impression that I was referring to members of the present Cabinet and not of the Cabinet of a previous administration, I simply admit the error.

Mr. Speaker: That shows how profitless is that sort of alleged point of order.

Mr. Dalyell: Is the Secretary of State aware that many of my constituents who work at Ferranti are thankful that he had no truck with the idea of a receivership. Is it not true that many of the difficulties in which Ferranti is placed could have been avoided if we had pursued the concept of joint ventures in exports, as certain German electrical firms have done? Will not my right hon. Friend, with the Department of Trade, examine the whole question of joint ventures in exports with a view to building up further trade, particularly with Latin America, where Ferranti is doing rather well?

Mr. Benn: My hon. Friend will know that I have never criticised the management of a company that has got into difficulties, because I know that the problems of British industry are formidable, and I have never believed that there are heroes and villains in our industrial story. I am sure that what my hon. Friend says is right. Export possibilities in many firms have been lost. My view is that had there been a planning agreement in this company four years ago, the problems would have been identified earlier and could have been corrected without the trauma and anxiety of the last few months.

Mr. John Davies: Will the right hon. Gentleman accept that the bankruptcy of individual concerns is perhaps preferable to a policy which leads to the bankruptcy of the whole nation?

Mr. Benn: I yield to the right hon. Gentleman in my expertise in these matters, as he bankrupted Rolls-Royce and Upper Clyde Shipbuilders and then brought them back into the public sector. Looking back over his experience in that period, it is questionable whether it would not have been better to call in the people concerned with those two great companies and seek answers to the problems without following the savage doctrine from which the right hon. Gentleman's own ideas derive.

Mr. Thorpe: Is the right hon. Gentleman aware that many of us heard him say that there were many in the House, including some of his fellow Cabinet Ministers, who advocated redundancies without themselves being prepared to


accept them? In fairness to him, we also heard him say that that was a slip of the tongue and was unintentional. Are we to take it, therefore, that he excludes all his colleagues from being prepared to face redundancies, including those of them who are pathologically opposed to remaining in Europe now and who will not be prepared to face redundancy after 5th June when the country decides to remain in Europe?

Mr. Benn: The right hon. Gentleman's question is not even up to his usual low level of supplementary questions on industrial matters. If in the heat of the moment I made a slip of the tongue, I corrected it in the House. Well-paid and secure people in any walk of life or in any party are not strongly placed to demand redundancies in British industry. To that point of view, I strongly adhere.

Several Hon. Members: rose—

Mr. Speaker: Order. We go on to tea.

Mr. Henderson: On a point of order, Mr. Speaker. May I draw to your attention that you must have inadvertently failed to notice one Member of the Scottish National Party who wished to intervene on the statement and was not called.

Mr. Speaker: The Scottish Nationals have not had a bad day today.

Following are the details:

HEADS OF AGREEMENT BETWEEN FERRANTI AND HER MAJESTY'S GOVERNMENT

1. Ferranti Limited (The Company) will take steps to increase its authorised ordinary share capital so as to enable the following transactions to take place.

2. Her Majesty's Government will subscribe £8⅔ million as ordinary share capital as follows:



£ million


4 million ordinary shares of 50p each £1.50 each
6


2,666,666 non voting ordinary shares of 50p each at £1.00 each
2⅔



£8⅔

This would provide Her Majesty's Government with 50 per cent. of the votes and 62½ per cent. of the total equity.

3. The rights attached to the non-voting ordinary shares would be increased to parity with the voting ordinary shares in the event of

a listing being obtained or a marketing being undertaken, or, at the latest, on 1st October 1978.

4. Her Majesty's Government will subscribe £6⅓ million by way of a Loan Stock 1983/87 carrying an appropriate commercial coupon.

5. [This clause deals with the Company's bank borrowing limits, and contains commercially confidential figures].

6. Guarantees by Her Majesty's Government in respect of bank borowings and bid and performance bonds will be withdrawn.

7. The management structure will be as agreed in correspondence between the Company and Her Majesty's Government.

8. The future dividend policy of the Company will be one appropriate to a publicly quoted company of similar character.

9. Appropriate warranties will be agreed between the Company and Her Majesty's Government.

10. In the event of the Company's advisers arranging a marketing or listing of Ferranti shares at a price in excess of £1·50 each within the period to 30th September 1978, then Her Majesty's Government will make available:—

(a) to the then holders of the 4 million shares in issue at 12th May 1975, 1,333,333 non-voting shares at a price of £1·00 each (plus half any excess of the marketing price over £2·00);
(b) to the public, any other shares from those in issue at 12th May 1975 which have been acquired by Her Majesty's Government in the meantime, at the full marketing price.

11. If at the time of such a proposed marketing, the price at which this could be undertaken is, in the opinion of independent advisers, materially prejudiced by the performance of Transformer Division, then Her Majesty's Government will take appropriate steps in relation to any losses of that Division so as to enable a satisfactory marketing to take place at the price which would otherwise be achievable, and the Company will proceed with the marketing accordingly. In the event of this clause being invoked by the Company, then the offer of shares under Clause 10(a) would be at a price of £1·00 plus half the excess of the marketing price over £1·00.

12. The Board intends to recommend shareholders to support the agreement when submitted to an EGM and directors intend to use the votes of their shares and of those of which they are trustees accordingly.

SRI LANKA TEA ESTATES

The Secretary of State for Trade and President of the Board of Trade (Mr. Peter Shore): With permission, I should like to make a statement on the report by a group of hon. Members on conditions on the British-owned tea estates in Sri Lanka.
There has been considerable public concern about these conditions, particularly following the recent television programmes. My right hon. Friend the Minister of State for Foreign and Commonwealth Affairs therefore asked the British delegation to the Inter-Parliamentary Union Conference in Colombo to extend its stay in Sri Lanka to investigate the conditions of workers and their families on the British-owned tea estates. Between 29th March and 8th April it held discussions with representatives of the Government of Sri Lanka, of the tea companies and of the local unions, and interviewed workers, medical staff and managers on a number of estates. Its report is published this afternoon.
In the course of an extensive tour of rural areas, the group visited tea estates owned by the Government of Sri Lanka and by British companies. Its report places the problems of the tea estates in the context of Sri Lanka's very real economic problems. The group saw much to disturb it, including malnutrition among some workers on the estates it visited as well as among the urban poor. It has recommended a number of specific measures designed to improve the living and working conditions of the estate workers and their families.
The report proposes that I should discuss these recommendations with representatives of the British companies with tea estate interests in Sri Lanka. I have today invited the President of the Ceylon Association and his colleagues to an early meeting for this purpose. Until this meeting has taken place it would not be right for me to comment on the detailed recommendations in the report, except to express the Government's warm thanks to my hon. and learned Friend the Member for Warrington (Mr. Williams) and his team for producing what will, I believe, be recognised as practical and constructive proposals for improving conditions on the estates. I should also like to express my appreciation of the co-operation and assistance given to the Parliamentary Group by the Government of Sri Lanka and their officials.
All I would add at this stage is that a solution to the wider problems of the tea industry must be sought on an international basis. During the discussion on

commodities at the recent Commonwealth Heads of Government meeting my right hon. Friend the Prime Minister gave special emphasis to the importance and value of an effective international agreement on tea. We shall continue to pay particular attention to this in our further consideration of commodity questions.

Mr. Higgins: Hon. Members and their constituents are naturally and understandably concerned about this matter. May I ask the Secretary of State to clarify the precise status of the report to which he has referred? Is it to be published as a Government White Paper, because I understand that it is not a report from a Select Committee of this House and, obviously, the House at this stage has not had an opportunity of studying it, whereas the Minister apparently has? Could he tell us whether the report confirms or rebuts the allegations which were made on the television programme to which he has referred?
Finally, on the question of commodity agreements, for which I understand he has responsibility, could the Secretary of State tell us whether he envisages that these might be concerned with the stabilisation of tea prices or with the raising of tea prices in the context of the report?

Mr. Shore: The hon. Gentleman has expressed concern. I think that when all hon. Members read the report they will undoubtedly feel the same sentiment.
The report has been published by the Department of Trade. It contains the sub-title or explanation:
An investigation into conditions on British-owned tea estates in Sri Lanka carried out by a group of British Members of Parliament.
There is no doubt about its status.
On the question about the particular incidents and interviews that formed part of the Granada Television programme, the team, as hon. Members will find for themselves, made detailed inquiries into these matters and its conclusions are different from those presented on the television programme. However, there is no difference between the general assessment of the real conditions of stress in Sri Lanka and on the tea estates as reported by the team and the conditions revealed in the television report.
On the hon. Gentleman's point about commodity arrangements and agreements, it is perhaps a little too early to say which of these two elements, the stabilisation of prices or the increase in prices, will receive the greater thrust of the discussion. However, I should have thought that both elements were important in a satisfactory international commodity agreement on tea.

Mr. W. T. Williams: May I express to the Secretary of State our thanks for the kind words that he has used about our work and our report? May I join him in expressing the thanks of the group to many people in Sri Lanka who went considerably out of their way to help us and give us information?
May I ask my right hon. Friend if he will do what he can, when he meets the tea plantation owners, to get them to organise some kind of agency to co-ordinate their activities with Sri Lanka trade unions, the Government of Sri Lanka and my right hon. Friend the Minister of Overseas Development in order to tackle the very sad conditions of poverty and hardship that we found in Sri Lanka?

Mr. Shore: I certainly share with my hon. and learned Friend the appreciation that he volunteered of the part played by the Sri Lanka Government in making this investigation possible.
Referring to the major recommendation that my hon. and learned Friend and his colleagues have made, namely, that over a wide range of matters that could have a considerable effect on the conditions and life of the people employed and living on tea estates—I shall certainly be very anxious to discuss this, in the first instance, with the tea companies' representatives and, following that opening conversation, in the second instance with all those in Sri Lanka and anyone else who can help us to arrive at solutions which will help to improve the conditions of life there.

Sir John Hall: Would the Minister not agree that the report provides one further confirmation of the fact that a large number of the people living in the Third World are living at subsistence levels, and that the only way in which this can be overcome is if the Western world as a

whole is prepared to make a genuine effort to contribute towards that solution, which means, in the end, an acceptance of the lowering of our own standards?

Mr. Shore: I entirely agree with the hon. Gentleman that the heart of the matter is the appalling poverty that exists in a large part of the Third World and, in particular, in a large part of Asia—the countries traditionally referred to as those of the Indian subcontinent. One of the most striking general conclusions that the team makes in its report is that today, leaving aside under-employment—which is a tremendous problem in Sri Lanka, as it is in other Asian countries—actual unemployment is running at a level of 18 per cent.

Sir Geoffrey de Freitas: Is my right hon. Friend aware that at least one member of the Select Committee on Overseas Development is puzzled by the nature of this document to which he has referred? Will it be sent to the Select Committee?

Mr. Shore: That is not a matter for me. If the Select Committee wishes to see this document, I cannot see any reason at all why it should not receive it, as I have done.

Sir John Rodgers: I am sure that all hon. Members are grateful to the Minister for the speed with which he has made this report available to the House. He has only had it in his hands a week or so. He should be thanked for what he has done.
However, is the right hon. Gentleman aware that the television programme "World in Action" has done vast damage to British interests not only in Sri Lanka but to a much wider audience? Is he aware that those of us who went on this mission found that the programme lacked balance, that it included a degree of distortion and that there are justifiable grounds for complaint? Will he take up with his colleagues on the Government Bench the possibility of examining whether some body, such as the Press Council, should not be set up to which British firms could appeal and which would apply to television programmes? This has been a scandalous misuse of the most important communication medium that we have.

Mr. Shore: A difficult balance has to be struck between being, as it were, fair to the reputation of particular companies in programmes of this kind and to the wide public interest there is in having the maximum freedom of comment, particularly when programmes are commenting on matters of such genuine human concern. I do not want to enter into this controversy. I hope very much that damage was not done to the reputation of British companies. The report shows that the problem is not just one of British companies but it is to be found in all the tea estates in Sri Lanka. The underlying theme of both the report and the Granada programme is the sheer problem of poverty and misery which so many countries, including Sri Lanka, its people and its Government, are having to face.

Dr. Dickson Mabon: Will my right hon. Friend in his discussion with his colleagues take into account that hundreds of thousands of former British citizens who formerly had the franchise, who are now the Indian Tamil, so-called, and who make up the bulk of those who work on the tea estates are today stateless, without the vote, without social benefits and without health service or education assistance and that they are discriminated against in a shameless way? Surely we, as a civilised country, with a reputation for denunciation of what is happening in South Africa in the name of apartheid, should take the same attitude towards the Sri Lanka Government with regard to the Indian Tamil minority and call on that Government not to discriminate but to restore the Indian Tamil's right to vote and their right to citizenship.

Mr. Shore: Of course there is a particular problem with Tamils, who originally came from Southern India and are employed in large numbers on these estates. But there are agreements and continuing exchanges between the Government of India and the Government of Sri Lanka about this problem. Clearly, while I am sure that we would want to do our best to help in any way we could to ease this problem, I believe that we must think very carefully indeed about the fact that here are two sovereign countries whose general policies are in no sense ill disposed in terms of the conditions of life of their peoples. We therefore have to handle any such approach with very great delicacy.

Mr. Beith: Will the right hon. Gentleman accept my welcome for arranging an early meeting with the British interests in Sri Lanka? While recognising that the problem goes far wider than the British interests involved, may I ask whether he will convey to them the fact that many hon. Members believe that British concerns should set an example of decent remuneration and decent conditions and accept that tea prices must respond to that? Finally, will the right hon. Gentleman stop preaching the doctrine of cheap food now that we have yet another illustration that cheap food supplies have often been based on inadequate support for those who produce them?

Mr. Shore: I hope that British companies will set an example wherever that is possible and reasonable. However, we must accept the fact that of the total supply of tea in Sri Lanka about 16 per cent. is produced on British-owned estates. Therefore, we really have to see this matter in the general context of the total production of tea in that country, and, indeed, more broadly, as I mentioned earlier.
On the hon. Gentleman's last point, if tea was within the common agricultural policy and if, in fact, it was within the context of the kind of discussions we have been having about our food policy as a whole, I might come to rather different conclusions. However, my worry about tea has been the one serious reservation I have had about the Lomé Agreement. Unfortunately, within the Lomé Agreement there is some support for East African tea growers but no support at all for Asian tea growers.

Mrs. Winifred Ewing: Has the Minister got even the vaguest intention of introducing any kind of legislation to affect citizens of the United Kingdom who happen to be involved in British companies overseas in regard to the conditions of their workers and so on? Is there even the vaguest intention to legislate, which this House could do if it wanted to do so?

Mr. Shore: The hon. Lady will be aware that the legislation which is relevant to the operation of the tea companies is the legislation of the Sri Lanka Government, and there is very extensive legislation there.

Mrs. Ewing: Answer my question.

Mr. Shore: That is, perhaps, the answer to the hon. Lady's question. However, whether we can, in different ways, ourselves help through our actions here, indirectly or directly, to promote the kind of policies which the hon. Lady would no doubt like to see is one of the matters I shall be discussing with the tea companies.

Mr. McNamara: Is my right hon. Friend aware that this House and the whole country owe a considerable debt to Granada Television for awakening our conscience to the price of a cup of tea in this country? Whatever discrepancies may exist between the evidence produced by that company and the report of my hon. and learned Friend the Member for Warrington (Mr. Williams), they have done a singular service not only to the people of Britain but to mankind as a whole. Will my right hon. Friend try to see where the discrepancies exist so that they may be ironed out? Will he also bear in mind that the television programme considered not only Sri Lanka but the whole Indian subcontinent? Therefore, in terms of seeing the Ceylon Association, he ought also to see people from India, Bangladesh and the tea companies there involved, and the conditions on their estates, in order to try to improve the situation there?

Mr. Shore: The positive side of the Granada programme—there have been a number over the last 18 months—has been indeed to awaken the conscience of people in this country to the very unsatisfactory rewards and prices received by our major tea suppliers. To that extent, I am sure that no one would dispute that they had done a useful service. However, it is only fair to say that, while no one will deny that that is a very valuable service, some criticisms have been expressed about the particular allegations they have made affecting certain families and conditions on their estates. We must keep a balance in our minds between the service done, on the one hand, and whether the attack on particular companies was fair, on the other hand. People should withhold judgment until they have read the report.
On the second part of my hon. Friend's question, I should like to reflect on this matter. However, I should like first to

have the conversation with the Ceylon Tea Company, about which I have informed the House.

Sir Bernard Braine: My hon. Friend the Member for Worthing (Mr. Higgins) asked a pertinent question about the status of the report. Is the right hon. Gentleman aware that I was the chairman of a well attended all-party meeting over a month ago which expressed deep concern about this matter and requested the setting up of a Select Committee? Is he aware that, in the event, the Select Committee on Overseas Development was unable to look into the matter because of the absence of any knowledge of the content of the report, and that the Leader of the House was unable to set up any other Select Committee? Since when has the IPU, or the CPA for that matter, been a vehicle for Government inquiry and report to the Government and not directly and primarily to this House? Is not this matter most unfortunate, if not actually discourteous to hon. Members who have expressed concern to the Government about it and have had to wait until today? Even now most of us have not seen the report.

Mr. Shore: We must get this matter in proportion. Here was a very serious matter of public concern. As the House will well recall, it so happened that a number of hon. Members were in Colombo at the time, and my right hon. Friend the Minister of State for Foreign and Commonwealth Affairs—I think very sensibly—invited those hon. Members who were on the spot to conduct an inquiry, as it were. I really cannot see why we should feel in any way that their report will cut across the work of the Select Committee on Overseas Development, which I am sure will carry on doing very useful work in its own right.

Several Hon. Members: rose—

Mr. Speaker: I am afraid that we must move on.

STATUTORY INSTRUMENTS

Ordered,
That the White Fish and Herring Subsidies (United Kingdom) Scheme 1975 be referred to a Standing Committee on Statutory Instruments. — [Mr. Coleman.]

RESIDENTIAL BOATS (SECURITY OF TENURE)

4.18 p.m.

Mr. Toby Jessel: I beg to move,
That leave be given to bring in a Bill to protect the occupiers of residential boats and other craft and moorings.
All parties in the House have accepted the principle that people should have security of tenure in the homes in which they live. Over the years, that principle has been extended. In the case of caravan dwellers it was extended only last Friday through the Mobile Homes Bill. The outstanding exception now remaining are people who live in houseboats. They usually own their boats. But the owners of the land to which they are moored normally have the right to evict them from their moorings and to cast them adrift, so that these people become homeless.
When this happens—it has happened 80 times on the River Thames in the last three years—it means disaster to these families. New moorings are very difficult to find. The boat may have to be sold at a price below its value because it has no mooring. A family may lose part of its savings and may have to turn to the local authority to be rehoused, as being homeless, so jeopardising the prospects of other families who need rehousing. This is all because the family has no secure right to a mooring in the first place.
The problem is not vast. There are only about 15,000 houseboats in the United Kingdom. I hope that this will not count against them. The House is traditionally sensitive to the wellbeing of small minorities, and I hope that that tradition will be demonstrated today.
The Bill will not seek to provide preferential treatment for houseboat families but merely to give them, as far as possible, the security enjoyed by the rest of the community.
I have met many of the people concerned, and here I declare my constituency interest. There are about 200 such houseboats in the Twickenham constituency. That is well under half of 1 per cent. of the population. In their occupations the people concerned comprise a diverse but

fairly typical cross-section of society. They include teachers, nurses and other social workers. There are designers, engineers and other skilled people. There are relatively few who are unskilled. There is one widow of a distinguished naval captain. Another is a well-known variety artiste. A fair proportion are young people saving to buy a house, which is something to be commended.
The one feature they have in common is a liking for the riverside scene and of its peace and quiet. They are independent-minded people who do not automatically want to follow the crowd. Thank God there are still some people in the country like that. It is sometimes said that they are scruffy people. That I refute. They are useful citizens who have worth while jobs. They look very much like everyone else. I cannot accept that it is right that they should continue to live in fear and uncertainty over their homes.
Until recently, the law has treated all boats in all senses as chattels rather than homes. However, two years ago Mr. Barber, as Chancellor of the Exchequer, agreed in reply to a Question of mine to treat houseboats as houses rather than boats for value added tax purposes. This meant that no tax was paid upon the purchase of them.
Last year the present Chancellor of the Exchequer decided to allow interest on loans for the purchase of houseboats to be set against income tax, so the Treasury, in successive administrations, has recently treated houseboats as homes. Not so the Department of the Environment. That Department apparently regards an Englishman's home as his castle only if it happens to be on dry land and under successive administrations it has failed to remedy this matter. I hope that the Secretary of State and the Under-Secretary will take note of this. I hope that the Department of the Environment will take another look at this matter and will support this Bill.
The main argument against the Bill is that it would interfere with the rights and duties of the water authorities in such matters as navigation, dredging and repairing the banks of rivers and canals. I accept the strength of that point but will include a clause in the Bill to allow for it.
Some three months ago, Mr. Peter Black, Chairman of the Thames Water Authority, the largest such authority in the country, wrote on this matter to my right hon. Friend the Opposition Chief Whip. He said,
… provided the Authority's existing powers to require the unmooring and removal of vessels on the Thames is unfettered, I would not feel able to say that legislation conferring security as between houseboat owners and their landlords would of itself prejudice the Authority. However, an absolute right to remain moored in a particular location on the Thames cannot now exist and should not be created.
He also said,
… I do not think that the statutory duties of Water Authorities need be unduly interfered with, provided any security granted is limited to the matter of the private rights of houseboat dwellers against their private landlords.
That seems to me to be an eminently sensible and balanced opinion, and I hope that the Department of the Environment will give it due weight.
What is at stake is the security and freedom from harassment and fear of a group of our fellow citizens who have so far, I believe, been accidentally excluded from the protection that is now given to practically everyone else.
It is on these grounds that I beg to ask leave to introduce the Bill.

Question put and agreed to.

Bill ordered to be brought in by Mr. Toby Jessel, Mr. Alan Lee Williams, Mr. John Wells, Mr. Phillip Whitehead, Mr. Tony Durant, Mr. James Wellbeloved, Sir Nigel Fisher, Mr. R. C. Mitchell, Mr. Geoffrey Pattie, Mr. Nigel Spearing, Mr. Norman Lamont, and Mr. John Tomlinson.

RESIDENTIAL BOATS (SECURITY OF TENURE)

Mr. Toby Jessel accordingly presented a Bill to protect the occupiers of residential boats and other craft and moorings; and the same was read the First time; and ordered to be read a Second time upon Friday 11th July and to be printed. [Bill 162.]

Orders of the Day — HOUSING FINANCE (SPECIAL PROVISIONS) BILL

As amended (in the Standing Committee), considered.

New Clause 1

REPAYMENT AND DISQUALIFICATION

' —(1) in any case to which section 1 of this Act applies the District Auditor shall at the same time as he makes the certificate referred to in subsection (2) thereof make a further certificate stating the sum or sums which and the person or persons whom he would have surcharged under each of subparagraphs (b) (c) and (d) of section 228(1) of the Local Government Act 1933 but for this Act.

(2) Within 28 days of making the certificate required under subsection (1) above the District Auditor shall apply to the Court for such order or orders as the Court may think fit to make as hereinafter provided in respect of the said certificate and against any person or persons named in it.

(3) On an application under subsection (2) above the Court may confirm, vary or quash the said certificate and if it confirms or varies it may:—

(a) order that any person named in the said certificate as confirmed or varied shall pay to the Council which incurred the expenditude or suffered the loss or deficiency in question, or to its successor Council, such part as the Court things fit but not exceeding £1,000 of the sums for the expenditure or loss or deficiency of which such person was responsible as certified therein; and
(b) whether or not it makes an order for the payment of any part of such expenditure or loss or deficiency if the total thereof exceeds £2,000 and any person responsible for authorising or incurring it is or was at the time of his so doing a member of a local authority, may order him to be disqualified for being a member or elected to a local authority for a specified period not exceeding five years.

(4) The Court shall not make an order under subsection (3) (a) or (b) above if the Court is satisfied that the person authorising or incurring the expenditure, loss or deficiency in question acted reasonably or in the belief that his action was authorised by law, and in any other case shall have regard to all the circumstances, including that person's means and ability to pay.

(5) Any person liable to be affected by any order made in proceedings under any of the foregoing provisions of this section shall be entitled to appear and be heard in such proceedings.

(6) The Courts having jurisdiction for the purposes of this section shall be the High Court except that, if no sum specified in the certificate given under subsection (1) above exceeds the amount over which county courts have jurisdiction in actions founded on contract, the county court shall have concurrent jurisdiction with the High Court.

(7) Any expenses incurred by a District Auditor in complying with the foregoing provisions of this section shall so far as not recovered from any other source be recoverable from the local authority from the audit of whose accounts such expenses arose or from the council which is the successor to that local authority.'—[Mr. Raison.]

Brought up, and read the First time.

4.25 p.m.

Mr. Timothy Raison: I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker (Mr. George Thomas): With this, it will be convenient to discuss the following amendments:

No. 14, in Clause 2, page 3, line 13, after first 'of', insert (a)'.

No. 15, in line 15, at end insert:
'and
(b) any sum or sums which the court may order to be paid to that council.'

Mr. Raison: I should explain straight away that Amendments Nos. 14 and 15 follow from new Clause 1. The new clause is to be taken in conjunction with the present Clause 1 and will, in effect, become Clause 2 of the Bill if it is accepted by the House.
The House will realise that our opposition to this shameful Bill is deepseated. As the debate continues this afternoon I am sure that it will become apparent that our position has been strengthened rather than weakened during our period in Committee.
We accept the notion of the rent loss certificate introduced in Clause 1 and the procedure by which a district auditor, dealing with the failure to implement the Housing Finance Act 1972, shall not apply the normal surcharge procedure—which also entails disqualification where the surcharge is £500 or more—but instead shall issue a certificate setting out whom he would have surcharged and by how much.
We accept this procedure for two reasons. The first is that, as we have repeatedly said, we have no desire to be vindictive and believe that justice should

be tempered with mercy. We want our approach to this to be eminently reasonable, as it was in Committee. The effect of the certificate is that it identifies the people concerned but makes it possible not to apply the full rigour of the law which was operating at the time when these acts took place.
Secondly, we accept the rent loss certificate procedure because it can be a means of ensuring that the business of making up for lost rents falls on the relevant community—in other words, that it falls on the people who benefited from the failure to implement the Act or, at least, elected the councillors who defied it.
We believe that that again is a right ingredient in the Bill. So far, so good. Clause 1 in itself is not in all ways unacceptable to us. Where we part company from the Government is in the way that Clause 1 precludes the possibility of any financial burden or electoral disqualification—except in the case of the original Clay Cross surcharge, which we come to under Clause 4—falling on councillors who deliberately defied the law when they refused to implement the Housing Finance Act. Make no mistake about it: it was deliberate defiance.
The position was made absolutely clear during the passage of the Housing Finance Act. Moreover, as I recall, on the Second Reading of the Bill my hon. Friend the Member for Southend, West (Mr. Channon) made it clear when he said:
The existence of default powers does not give a local authority the right to default on its statutory duties … default on a statutory duty is a breach of the law."—[Official Report, Standing Committee E, 23rd March 1972; cc. 4256–7.]
The law was absolutely clear, and I do not believe that any councillor caused it to be broken except deliberately, though our new clause strengthens the safeguard against a penalty being imposed on anyone who acted
… reasonably or in the belief that his action was authorised by law.
In other words, we seek in our new clause to make it completely impossible for anybody to bear a penalty or burden unless he has clearly and knowingly breached the law. We do not want anyone to suffer penalties unfairly. But we insist that to give this immunity from the consequences of actions in defiance of


the law can only be an encouragement to similar breaches of the law in the future. We can all list examples of how this might occur.
This is our fundamental objection to Clause 1. It is a matter of profound principle, and one where we disagree with the Government's approach.
4.30 p.m.
There is a further reason why we believe that the Secretary of State, the Attorney-General and their colleagues are wrong. The Government are taking this step before the full facts are known. This is one of the several crucial differences between the affairs that we are discussing at the moment and the Poplar example which has featured so much in our discussions. It is entirely wrong in principle to bring forward this measure before the facts are known. It is also foolish in practice. Moreover, it is a breach of the undertaking given by the Prime Minister on 4th April, when he said:
Only when we see the full extent and magnitude of the problem will it be possible for to to make our recommendations to the House and this we shall do."—[Official Report, 4th April 1974; Vol. 871, c. 1445.]
We still cannot see the full extent and magnitude of the problem. In many ways we know very little more than we knew when we started on this issue a year and a half ago. We have discovered certain facts in Committee, but they are extremely limited. We still do not know, for example, the names of the authorities where surcharges may apply. As it happens, the district audits are proceeding very slowly and in nearly all cases have been suspended. I can understand that the district auditors may take the view that it makes sense to suspend audits while awaiting the results of the legislation, but it adds to the difficulties. We do not know what it is about which we are legislating. That cannot be a good basis for legislation. We know little more than that the sum involved may be £1·5 million spread over 400 councillors.
We know that in cases where the audit has been completed, apart from the special audit at Clay Cross, there has been no surcharge or disqualification imposed. We also know now—this was the one valuable fact to come out in Committee—how relatively small are the sums

to be recovered in all but one or two of the possible instances. But, essentially, we are in the same position as we were in April 1974.
We cannot believe that it is right to decide whether all these councillors should be let off while we are in ignorance of the facts. We think it especially wrong, if not tragic, that the Secretary of State and the Attorney-General should promote such a procedure when the rule of law and the sovereignty of parliamentary government are under challenge on many sides. What would they say, for example, if some local authority in the future decided not to impose the rent increases which possibly will be required, perhaps by legislation, next year or even this year? It is on the cards that we may have legislation. We are in danger of having this deeply offensive community land legislation on the statute book. If it goes on the statute book, it must be implemented. No one must defy it. But people will be profoundly opposed to it and will have before them the example of what has happened to those who defied the Housing Finance Act 1972. The Government are setting a most dangerous precedent.
What do we propose to set up in substitution for the Government's procedure? Our clause sets up a scheme devised by my hon. and learned Friend the Member for Southport (Mr. Percival), to whom I pay tribute and express my thanks, which could achieve a moderate answer to this admittedly very difficult question. In Committee we tried to persuade the Government that in its essentials it offered a real opportunity to take the heat out of this difficult matter, and came up with an answer which managed to combine moderation and common sense with a final upholding of the principle of the rule of law which we believe to be so important. I hope that the House will think carefully about what we are proposing again in this debate and will ensure that it is supported.
In saying that, I am encouraged by two statements that we have had from Ministers during the passage of the Bill so far. On Second Reading the Secretary of State said:
I do not present our conclusions to the House in any spirit of dogmatic certainty that we have got them exactly right still less in a spirit of triumph."—[Official Report, 24th March 1975; Vol. 889, c. 50.]


When I heard those words I was extremely grateful, because they appeared to indicate that the right hon. Gentleman was prepared to listen to what we had to say, and it was my hope that he would accept amendments which we put forward that were clearly more reasonable than the Bill's proposals. I acknowledge that we are to have some concessions from the Government today. However, I emphasise that they are useful but minor. We believe that it is not too late for the Government to accept the more fundamental amendment set out in our clause.
In Committee the Under-Secretary said:
I confess that we are not entirely satisfied with the Bill as it stands."—[Official Report. Standing Committee D, 17th April 1975; c. 194.]
He had our full support in saying that. But, again, cannot he see that in the approach put forward in this clause and in our other amendments we are not attempting to wreck the Government's proposals? Cannot he see that they are a genuine and serious attempt to improve them? The hon. Gentleman said that he was not entirely satisfied with the Bill. Here is a chance to improve it in a way which might begin to make it, although not wholly acceptable to the country as a whole, much more acceptable than it is at the moment. The Government must know that they have introduced a measure which has caused profound distress among very many people of whom a large number would normally be sympathetic to their party. Many people feel that this is perhaps the worst of all the actions taken by this present Government.
When the Under-Secretary made the statement to which I have just referred, we were debating the method of collecting money which had not been collected. But I do not think that the hon. Gentleman confined his remark to this point. Therefore, I hope that we shall have from the Government some recognition that they still have not got it right. Let them prove the good intentions that they have expressed by accepting this clause which is based on the scheme put forward in Committee and which was never undermined by the Government. All that the hon. Gentleman said in defence of the Bill was that Government supporters

believed that the Bill had got it about right. He did not set out to give a detailed defence of his approach to this matter, as opposed to the approach of the Opposition.
The essence of our proposed scheme is that the possibility of financial penalty in place of surcharge and of disqualification should remain. But we have several important modifications to that. First, the full rigour which was required under the 1933 Local Government Act need not be exacted. The kind of modifications introduced in the 1972 Local Government Act should be applied in this Bill.
Secondly, the guilt, if I may call it that, of an offending councillor would have to be clear beyond all doubt. I do not say that the Bill gives any reason to suppose that innocent people might be brought to book. But we have deliberately emphasised this point. We do not want anyone to suffer who has not committed an offence or defied the law.
Thirdly—and this is very important—the decision whether penalties should be imposed should lie with the court, and that, in effect, will mean the High Court. This point was advocated during Second Reading in the eloquent speech by the hon. Member for Liverpool, Toxteth (Mr. Crawshaw), who said something which is bound to command a great deal of support; namely, that by putting this decision into the hands of a court, rather than into the hands of the Secretary of State or even of Parliament, it is possible to take this highly contentious matter to some degree out of the political arena. I submit that there is very good reason for doing so.
It is also true that the courts are highly experienced in making the kind of assessments or judgments that would be required under our new clause, because that in effect is what they are doing the whole time. Given that we have landed ourselves in this very contentious political dilemma, in our view it would have been better to take the question of what penalties should be borne out of the hands of the politicians, who are inevitably caught up in this difficult wrangle, and put it into the hands of the dispassionate courts.

Mr. George Cunningham: Would the hon. Gentleman apply this principle only to


cases where local authorities incurred wrongful expenditure or where they did not collect money that they should have collected, or would he apply it to cases where other public authorities did the same thing? Would he like the courts to take the effective decisions in both cases?

Mr. Raison: That is an extremely general question. I am not clear what sort of example the hon. Gentleman has in mind. My approach throughout has been to look at the matter in a specific way, because we need a commonsense answer. We shall betray ourselves if we talk in terms of wide generalisations. I hope that the hon: Gentleman will forgive me if I do not give him a clear-cut answer on this point, because I do not think it is necessary to do so.
Fourthly, I believe that our scheme overcomes the weakness of the Government's approach, because it would come into action only when the facts were known. Although the legislation would be completed before the facts were known, before the rent loss certificate had been issued and so on, nevertheless the actual decision about the type of penalty—whether there would be surcharge or disqualification—would be taken only when the facts had been brought to light through the procedure of the district audit. Because we have complained again and again that it is wrong to legislate with lack of knowledge of all the facts, it must be accepted as a powerful argument that it is much better to know what one is doing.
Therefore, the essence of this approach is that once the rent loss certificate has been issued the district auditor would apply to the court. The court may, first, order that any person named could be liable to up to £1,000 towards meeting the deficiency, and, secondly, if the total loss in any particular area is over £2,000, it may impose disqualification of up to five years on those responsible.
The differences between this approach and what would have prevailed if the Bill had not been brought forward are, first, that there is a maximum fixed to the amount of the liability. Moreover, the extent to which people would have to meet that maximum—in other words, the amount they would have to pay—would

be determined in the light of the circumstances.
Secondly, the raising of £500 to £2,000, as the point where disqualification may be incurred is quite simply a reflection of the change in the value of money over the passing of the years. However, coupled with this is the stipulation that one does not have to go the whole hog. If one disqualifies, one does not have to disqualify for the full five years. It is possible for the court to specify that in the circumstances it should be one year, two years, or three years, or whatever is the appropriate amount for the disqualification.
I emphasize that under subsection (4) there would be no order if a councillor acted
reasonably or in the belief that his action was authorised by law.
Subsection (4) also says that the court should have regard to
all the circumstances, including that person's means or ability to pay.
Therefore, if the objection is made that the burden falls equally on the rich and the poor, the court has the opportunity—as it has in the not exactly parallel case of the ordinary fine—to make a decision about what is appropriate. Those who might argue that the people concerned were often very poor must recognise that there is this important qualification in our approach.
4.45 p.m.
Those liable to be affected by an order would have the right to appear and be heard in the proceedings. In other words, this scheme makes it possible to deal with those who defy the law in a way that is appropriate to the degree of their defiance, rather than under the perhaps too blunt instrument of the 1933 Act which allowed only a five-year period for disqualification and full surcharge. However, it sticks to the vital principle that a person must not be able to break the law with impunity, even if he has encouragement from the Labour Party in doing so.

Mr. George Cunningham: Or the Conservative Party.

Mr. Raison: I can hardly believe that the hon. Gentleman is suggesting that the Conservative Party encouraged people


to break the law created by the Housing Finance Act.

Mr. Thomas Swain: How does the hon. Gentleman reconcile what he has just said with the fact that a number of councillors of one council were surcharged by the district auditor, asked to meet the Minister's civil servants in London and then let off the whole of the surcharge on the understanding that they would go home and be good boys?

Mr. Raison: I do not know what the hon. Gentleman is talking about, but we shall have a chance to develop that point in the debate which is now taking place.
During the course of the Committee proceedings the Under-Secretary argued and put forward the objection that the scheme that we were introducing would entail proceedings that would be long-drawn-out. Obviously, court procedure will take a little time; nobody would dispute that. We do not accept that there is any particular need for long-drawn-out proceedings, because the rent loss certificate would set out the essential facts.
The Government's approach to this whole question is far more long-drawn-out when they propose to make it possible to spread the recovery period over no less than five years, with even the possibility of an extension. That five years would be five years of bitter resentment by those who derive no benefit from the refusal to implement the Housing Finance Act 1972. I should have thought that at least the hon. Member for Derbyshire, North-East (Mr. Swain) would know how bitter the resentment will be among people who are liable to have to pay the penalty for something they never did.

Mr. Swain: The hon. Gentleman does not appear to have done his homework. Is he aware that in the year immediately prior to the refusal to implement the provisions the Clay Cross Council was the only council in England, Ireland and Scotland—the whole of Great Britain—which reduced its rates by 3p to the benefit of everyone living in the district?

Mr. Raison: The hon. Gentleman should be careful about what he says in defence of the Clay Cross Council, but we shall have ample chance to discuss that matter when we reach Clause 4.
If there is trouble in the court proceedings and if they take time--as I accept they may well do--that is the inevitable consequence of defying the law. We cannot get away from the fact that if people defy the law there are bound to be—or there should be--court proceedings, and they cannot necessarily be skimped.
This scheme gives every opportunity to be reasonable, to be merciful and to ensure that bitterness is avoided. It substitutes a somewhat different notion from that of the surcharge as we know it, but it does so in the most fair and commonsense way that is possible. It also--and this is vital—upholds the view that it is utterly wrong for a Government to be able to come to the aid of their own political supporters in the way that is proposed in the Government Bill. That is the shame of the Government's approach. The Opposition's approach confirms that the law is there to be obeyed and that those who expect to defy it and to be let off must think again. Facile talk about wiping the slates clean is not enough. As the House knows, this is a very grave matter. I commend cur new clause to the House.

The Attorney-General (Mr. S. C. Silkin): It will probably be for the convenience of the House if I now give the Government's view of the new clause. The hon. Member for Aylesbury (Mr. Raison) has moved its Second Reading with fairness and moderation. If one can judge by his speech, the whole atmosphere is very different from the atmosphere on Second Reading of the Bill.
I should like to be able to say that, having given full consideration to the new clause, the Government can accept it, but I cannot so advise the House. However, I acknowledge that it is a carefully constructed attempt, as one would expect from the hon. and learned Member for Southport (Mr. Percival), to mitigate the rigours of the law for the benefit of those who would otherwise have been surcharged and might have been disqualified for failure to implement the Housing Finance Act.
To those persons, whether in the House or outside, whose consciences do not permit them to accept any retrospective concession in favour of those who fail


to obey the law, the clause is the Opposition's answer. We must be absolutely clear about it. The existing applicable law, the 1933 Act, gives those who are surcharged the right to apply for a declaration that they acted reasonably or in the belief that their actions were authorised by law. It gives power to the Minister to relieve them of surcharge, wholly or in part, assuming the figure is right, and the declaration relieves them from disqualification.
It follows naturally that, in putting forward the new clause, the Opposition must be saying that that is not sufficient in the circumstances of this case. They must be saying that, in the special circumstances of this matter, it is right not to be content with those provisions but to go much further by way of retrospective relief. We on this side of the House very much welcome that view. We think that it is right. Whatever may have been said on Second Reading, whatever extravagant language may have been employed here or outside, that is the official Opposition view, and we welcome it.
Indeed, the clause implicitly accepts several of the assumptions underlying the Bill. The first is the need for legislation to deal with the aftermath of the Housing Finance Act. It is a pity that some of the Second Reading speeches used such language as "the most serious threat to our constitution", and did not spell out what we have always said, and what I said in trying to wind up the Second Reading debate, that if the Opposition had been in Government they, too, would have taken legislative action.
Secondly, the clause accepts that there is no immutable principle which governs the period or even the facts of disqualification. This is quite new. The clause makes it purely discretionary. It retrospectively quadruples the minimum amount of deficiency which would otherwise, under the applicable law prior to the 1972 Act, have resulted in disqualification. We welcome that new principle.
Thirdly, it accepts that that part of a deficiency which is not ordered to fall on councillors will be paid, as the Bill provides, by tenants or ratepayers.
Therefore, the difference between our approach and that of the Opposition has

become much clearer and much narrower than during those stirring and noisy hours during Second Reading. We say "Let us wipe the slate clean". The hon. Gentleman anticipated that phrase, which, incidentally, is not mine. It is that of Mr. Neville Chamberlain. We say "Let us have no ragged edges". The Opposition say "We do not ask for a pound of flesh but only for a few ounces".
To get those few ounces, the Opposition provide that every case which would have been surchargeable must go through the courts. That is a new principle, which we cannot accept. We cannot see how it could possibly help the situation with which the Bill is intended to deal to have case after case paraded through the courts, irrespective even of the wish of those concerned.
Our broad principle is, as it always has been, to let those who benefited pay. Certainly, to that principle we give the latitude, which the hon. Gentleman accepted today, the latitude given to local authorities to make their own decision as to whether these sums should fall on the rates. We know that that is a political decision which they will have to make. They will have to make it in full knowledge of the possible political consequences.
The principle of the clause is to punish first and then recover from the beneficiaries or the ratepayers.

Mr. Raison: The principle that we are advocating is "Find out". It is a large part of our objection to the Bill that it proceeds in absence of the facts. The first thing we are aiming to do is to find out the facts.

The Attorney-General: That may be, but there is also the situation of punishing first and then recovering from the beneficiaries or the ratepayers, because until one knows the extent to which the surcharged councillors, or councillors subject to the equivalent of surcharge under the clause, will pay, one does not know to what extent one must recover. We believe that the result is the worst of both worlds. In particular, it fails to wipe the slate clean.
5.0 p.m.
We believe that the precedent for wiping the slate clean is clear and persuasive. Despite the many hours we spent


on it in Committee, I make no apology for returning to it today. The background to the Audit (Local Authorities) Act 1927 was in many ways similar to the background to this Bill. Of course it was not identical. We would not expect the circumstances to be identical. Precedents are not—or, at least, very rarely—founded on identical circumstances. That Act, like this Bill, involved a substantial number of councillors—about 100 in all. Strong feelings were aroused about the events which led to the passing of that Act and which were similar to those leading to this Bill. The law was defied. Although for a time the law may have been in doubt, it became certain, and thereafter it was defied. Whatever may have been the original intention of those who put forward the Bill—Mr. Neville Chamberlain, the Minister of Health, and others—as it went through Parliament it was amended again and again to enable those councilors to be relieved of penalty who, even whilst the Bill was going through Parliament, continued deliberately to defy the law.
That Bill and its amendments gave greater relief than does this Bill. It remitted, and enabled the Minister to remit, surcharges which had already been made—in that case for excessive payments. Here we are dealing mostly with deficiencies, but the principle is the same. Indeed the hon. and learned Member for Southport said:
I do not know whether there is much difference, but if one is worse than the other, unlawful expenditure is a bit worse than simply failing to do something."—[Official Report, Standing Committee D, 29th April 1975; c. 308.]
He may well have been right. At any rate, in doing so, the Act relieved 97 councillors from the virtual certainty of prison, which, at that time, followed automatically from failure to pay a surcharge.

Mr. John Nott: The Attorney-General is employing a clever lawyer's argument. Could he not find an earlier precedent than that of Mr. Chamberlain? Is not there an earlier precedent than that of Mr. Chamberlain to advance to support his case?

The Attorney-General: I am making the case which I have to make and which I believe is right, on the basis of a precedent which, in my view, as the House will

hear, is perfectly strong and valid. It is not necessary to go back any further, although there may well be precedents nearer our time. Let me deal with one at a time.
By a series of manoeuvres designed to wipe the slate clean even of the consequences of defiance carried on almost up to the Royal Assent, the Bill relieved councillors of the new penalty of disqualification written into the Bill itself which, in the original form of the Bill, they would have suffered if they had continued, as indeed they did, to defy the law. That original intention was removed by amendment. That amendment removed the penalty of disqualification from many.
The Bill was introduced in May 1927. Over two years earlier, in April 1925, the House of Lords held that the overpayments were unlawful. Honourable Members have reminded the House of the times in which we live today. The year 1927 was not a shining example of peace within the United Kingdom. The Minister wished to remit all the overpayments, but in February 1927 the court unexpectedly said that he could not do so in the case of those surcharges which had already been the subject of action in the courts. Therefore there were two classes of overpayment—those which the Minister could remit under the existing law, because they had not been the subject of court proceedings, and those which because they had been the subject of those proceedings, he could not remit. In that difficult situation and dilemma the Minister decided to legislate to solve the problem.
I accept the point made in Committee that the Bill introduced a new penalty of disqualification, but in solving the problem as a matter of urgency it was the circumstance of continuing defiance of the law which called upon the Minister to bring in that legislation—indeed within a few weeks of the decision in the Dore case. That was the main purpose of that Act. I adhere to the view which I expressed before. A general change in the law was made. The main purpose was to deal with a situation comparable to that with which we are dealing in the Bill today.
In its original form the new penalty of disqualification would have applied in


every case except where audit had begun and surcharge resulted before 1st April 1927, that is to say, shortly before the introduction of the Bill, which was in May 1927, when it was generally known that the Bill would be introduced. The whole basis upon which that was justified was that the measure was known about because there had been publicity. On Second Reading it was pointed out to the Minister that councils were still paying out illegally. To that he replied:
I think that where warning has been given, and everybody knows now that there is to be a change, it would be unreasonable to say that people who went on disobeying that warning should escape.
In general that was an impeccable sentiment. In case there was any doubt about his meaning he added that
the date of the final decision of the House of Lords is known, and that is really the date from which everybody knew what the law was."—[Official Report, 15th June 1927; Vol. 207, c. 1034.]—
that is to say, April 1925.
With that statement I entirely agree. Mr. Chamberlain said that everybody knew the law from April 1925. I agree. Any over-payments made after that date could only have been in plain defiance of the law. Mr. Chamberlain said that it would be unreasonable to allow to escape disqualification—though it was a new penalty—anyone who defied the law after the decision of the House of Lords.
About two weeks later the Bill was in Committee. In Committee, a proviso was inserted into the disqualification clause. The purpose of that proviso was to do the very thing which the Minister, only a week or two earlier on Second Reading, had said was unreasonable because it exempted from disqualification any councillor who had been or would be surcharged in respect of any expenditure or loss incurred before 31st October 1927—some months ahead.
As a result of that, the test for exemption from disqualification was no longer audit before the Bill was introduced, but overpayments in deliberate defiance of the law so long as they were made no later than three months after the amendment, nearly six months after the introduction of the Bill, and two and a half years after the date when, as the Minister clearly said, everybody knew what the

law was and that it would be unreasonable to allow those who went on disobeying it to escape disqualification. Plainly, he regarded the greater evil as leaving ragged edges, or a slate which had not been wiped clean.

Mr. Ian Percival: I am sure that the right hon. and learned Gentleman does not wish to mislead the House. He said that the proviso to which he was referring was introduced in Committee. If he looks again, he will find that it was not. The proviso was in the original Bill, but the date in the original proviso was 1st April 1927. The Committee proceedings were on an amendment at that date to substitute 31st October, that date being designed to give the Poplar Council the opportunity to give proper notice to terminate its contract with the trade union. Is that not a very different state of affairs from what the right hon. and learned Gentleman has just presented to the House?

The Attorney-General: I do not know what the hon. and learned Gentleman is quarrelling with in relation to what said.

Mr. Percival: The proviso was not introduced in Committee.

The Attorney-General: The date in the proviso, originally 1st April 1927, for the reason which I gave—that people already knew that this legislation was coming forward—was altered to 31st October of that year because, and only because, by doing so certain councillors would be protected from disqualification, notwithstanding their deliberate defiance of the law. If the hon. and learned Gentleman can show that is wrong, he will have his opportunity to do so, but I am satisfied that it is right and that there cannot be any doubt about it.
The retreat had begun. It was a retreat, be it noted, specifically related to disqualification of those who had deliberately defied the law.
Let us now turn to the surcharges and we shall see how the retreat progressed. On Second Reading the Minister had said that, until the House of Lords decision, councillors may have been uncertain of the law. He continued by saying that
it was on that ground that I considered in this case it was proper for me to remit that surcharge, although, of course, the law having once been decided by the House of Lords, it


would not have been proper for me to remit a surcharge if the council had gone on paying those wages, after it did actually know the law."—[Official Report, 15th June 1927; Vol. 207, c. 1029.]
5.15 p.m.
In our Committee discussions the hon. and learned Member for Southport did his best to escape from the precedent of the 1927 Act. Indeed, he argued that the law was not clear until the judgment in the Dore case in February 1927, which was the immediate reason for bringing in the Bill. Even if that were so, it would not help his argument, because the Minister in fact remitted overpayments which had been deliberately made up to 31st October 1927, which was eight months after the Dore case. But that is not right. The hon. and learned Gentleman was clutching at straws when he put forward that argument, because we have what the Minister said in the debates. It was he who said that the law was clear, and he had no doubt about it, from April 1925, the date of the decision in the House of Lords. In the clearest possible terms he said that it would not be proper to remit a surcharge if the council went on overpaying after the House of Lords had made the law clear.
The Minister found himself squeezed into the position that he could not achieve his objective of wiping the slate clean unless he was prepared to remit surcharges in respect of unlawful expenditure incurred long after the House of Lords decision. He did it in three ways—first, by exercising his power to remit under the old law, whenever he could; secondly, by the direct operation of the 1927 Act, whenever that applied—and he did his best to make it apply to every case that supervened upon the introduction of the Bill—and, thirdly, by an ingenious mixture of the two. He did it directly by legislation through Section 2(6), which automatically cut off enforcement proceedings for surcharges in mid-stream and by amendment of Clause 4 so as to leave intact his powers under the old law where illegal expenditure was incurred before 31st October 1927. That was a late amendment to the Bill.
The Minister, having given himself the power to do that, notwithstanding that the expenditure was in the class which he had said could not be justified because the law was known, then used those

powers up to as late as August 1928 to remit surcharges on Poplar councillors of over £17,000 for the year ended 31st March 1927 and over £8,500 for the year ended 31st March 1928; that is, expediture incurred up to 31st October 1927. Those accounting periods were respectively one to two years and two to three years after the House of Lords had made the law clear and the Minister, in his original words, had said that he could not justify remitting the surcharge.
I am not criticising the Minister of the day. He took a commonsense path. He fulfilled his objective of wiping the slate clean. Of course, he might have taken some such course as is proposed in the new clause, but he did not. In order to wipe the slate clean he found himself constantly amending the Bill and relieving councillors of surcharges, exempting them from disqualification, and, indeed, saving from imprisonment, at any rate, 97 councillors and others, many of whom, as I have said, continued to defy the law after it was made clear.
The Bill was backed, and I assume that his actions were approved, by the distinguished Attorney-General of the day, the future first Viscount Hailsham. At any rate, Sir Douglas Hogg, as he then was, saw no reason to resign.
On Third Reading the Minister delivered himself of the most impeccable sentiments, which have been more than once quoted in our debates, to show that he did not intend to condone defiance of the law. It may not have been his intention, but his actions in those circumstances spoke louder than his words, for condone it he did.
I maintain that, faced with a problem as difficult as that of my right hon. Friend, and in many ways similar to that problem, the then Minister found a similar commonsense solution. In circumstances like those and these the better course is not the course that the Opposition propose, which will result in court case after court case, but rather to cut off and wipe the slate clean.

Mr. Raison: Has it ever occurred to the right hon. and learned Gentleman as he recites these precedents that if one bases one's argument wholly on precedent, as he is doing, one will be in no position at all to resist people who break the law in future? They will simply spout


again the precedents which the right hon. and learned Gentleman has spouted to the House and the Committee. There will be absolutely nothing to fall back on. Therefore, if the argument is based entirely on precedent, as it apparently is in the right hon. and learned Gentleman's eyes, he is undermining the law not merely on this occasion but for future occasions.

The Attorney-General: I am grateful to the hon. Gentleman. I shall be coming to that very point in a minute or two.
I was referring to the Opposition's argument that the purpose of Mr. Chamberlain's Bill can be distinguished because it set up a new system, that of disqualification and so on. Of course it did that, I agree, but I ask the Opposition what real difference that makes. Mr. Chamberlain's Bill plainly removed, and enabled him to remove, the penalties for defiance of the law, and he did not hesitate to do so.
What does it matter that in doing so he introduced this new system? If the present Bill made some general change in the law regarding audit—improvement, it may be—in addition to what it now does, would hon. Members opposite abandon their opposition to it? Of course not. No doubt we could have done that. I do not believe that it would have been an open or frank thing to do, because we know the purpose of this Bill. Mr. Chamberlain undoubtedly had the purpose in his Bill of deflating a situation in which about 100 councillors, many of them very popular councillors, were deliberately defying the law, and he added to the Bill to do so a provision for disqualification.
We have argued over other precedents. I believe them to be valid, but I do not believe that the House would be helped if I spent much time pursuing them in detail now. The 1927 Act, in my view, is the clearest precedent that one could have.
Turning to the point which the hon. Member for Aylesbury properly made, a point which I do not shirk, I do not suggest that the existence of a precedent means that it must be followed; nor, indeed, looking at it from the other side, that the absence of a precedent has the opposite effect. If one took that view

there would never be any precedents. I do not suggest that a precedent is a substitute for one's own judgment, but it is an indication of how Parliament has looked at a comparable situation in the past, and, therefore, it is something that we are entitled to take into account and to derive benefit from when trying to solve a similar problem.
I do not suggest that there are no ways other than ours of solving the problem. This is a real problem, as the hon. Member for Aylesbury has fairly, frankly and frequently agreed, today and in Committee. It exists, however distasteful that may be. I believe that our solution is as fair as it can be. It will not be improved by departing from Mr. Chamberlain's principle, that once one starts wiping the slate clean one had better finish the job. That is the basic reason why I cannot accept the new clause, well-intended though I agree it is. If it is pressed to a Division, I invite the House to reject it.

Mr. Ivan Lawrence: Like the murderer in "Macbeth", I expect, the word "Amen" has stuck in the Attorney-General's throat. Notwithstanding the sweet reasonableness and the gentle tone of his reply, he will not hide from us or from the country the fact that the Bill is a thoroughly sickening measure. I have no doubt that the Attorney-General suffers from embarrassment about it, just as I am sure that many Labour Members will come to regret the day that they ever supported this measure. I believe that many will, even today, be thoroughly ashamed of the course which they may be taking.
It is a sickening measure simply because it treats the rule of law with utter and complete contempt. It is not just that people who deliberately defied the law hoped that they might be able to avoid the consequences of their wrongdoing: they were encouraged so to think. They were complimented by a leading member of the Labour Party at a meeting of the National Executive—a man who is now a senior Minister.

Mr. Deputy Speaker: Order.

Mr. Dennis Skinner: Yes, he is reading.

Mr. Deputy Speaker: I am obliged for the help. This is not a Second Reading


debate. Perhaps the hon. Member for Burton (Mr. Lawrence) will address himself to the new clause.

Mr. Lawrence: I was addressing myself to the clause, Mr. Deputy Speaker, and prefacing my remarks with the reason why I felt so strongly that it should be accepted.
It is precisely because this measure is a contempt for the rule of law and because the new clause which my hon. and learned Friend the Member for Southport (Mr. Percival) has devised with great skill and ingenuity upholds the rule of law, and, as my hon. Friend the Member for Aylesbury (Mr. Raison) said, tempers justice with mercy, that the clause should be accepted.
The new clause upholds the rule of law in two respects. First, it places emphasis upon the courts of law and gives them a function in the fair ordering of the unsatisfactory state of affairs which has resulted particularly in being merciful to councils which have not wilfully continued to defy the law. Also, it underlines the principle, which is important at this time in our history, that councillors everywhere must be subject to the rule of law. It was never as important as it now is because, as we read in the papers and as we have seen from what has happened in recent months, there is unfortunately in some councils a slide from respect for the rule of law. There has been an abuse by councillors in some parts of the country of the powers vested in them under the law. Councillors have to exercise far greater power, particularly in planning matters, than they have ever exercised in the course of the development of those councils.

Mr. George Cunningham: Does the hon. Member want the same sanctions to apply to Ministers?

5.30 p.m.

Mr. Lawrence: The sanction of the rule of law must apply to everybody. I am merely underlining the fact that councillors must now be made aware of the fact that Parliament, of all places, will not tolerate any abuse of the rule of law. That is particularly important since the rule of law is beginning to slip throughout the country, and it is, therefore, all the more important that we dig in our heels

and safeguard and enforce the rules. That is why the clause is so important.
I listened with care to what the Attorney-General said and with the respect that a junior member of the Bar always accords to the leader of the profession. However, I found his objections to the clause pitiful. He has gone back again on the plea of Labour Members that the slate must be wiped clean. For years I have been defending villians in the courts of this part of the world—

Mr. Swain: And getting paid for it.

Mr. Lawrence: They would have loved to have the slate wiped clean. Everyone who offends against the law and then sees the consequences of the law visited upon him wants the slate wiped clean, particularly if the wiping of the slate means that he does not have to suffer the consequences of his lawlessness. We are prepared to see the slate wiped clean for those who did not deliberately and wilfully continue to transgress. But that is not what Labour Members want. The rule of law means that those who wilfully offend against the law with the full knowledge of the consequences will not have the slate wiped clean and that the consequences must follow.
The second argument to which I take exception and which the Attorney-General has advanced in criticising the clause concerns precedent. I will not even begin to touch on the arguments which occupied hours in Committee and which were based on precedent. The Attorney-General has been shown to be particularly weak in his reliance upon precedents. Just now he said that he was not completely relying upon precedent and that in the end he relied upon his own judgment. In Committee, however, he relied for hours upon precedent, and upon feeble precedent at that.
I will not go through the argument, but we do not accept that what Mr. Chamberlain did in 1927 is a precedent for what the Attorney-General is seeking to do now. Two wrongs cannot, do not and will not make a right. If Mr. Chamberlain's action in 1927 was the same as the action which is contemplated by the Bill it was equally a contempt for the rule of law and it was equally wrong. The Attorney-General has said nothing to persuade me that our new


clause is wrong, and, therefore, I support it.

Mr. George Cunningham: If this new Clause were being proposed as an amendment to the normal legal provisions which govern the surcharging of councillors I for one would greatly welcome it as an improvement on the existing law. The Opposition, and particularly the hon. and learned Member for Southport (Mr. Percival), have done the House a service in devising this flexible and more responsive procedure which should supplant the more rigid provisions in the 1933 Act and the 1972 replacement of it. The question is whether it is apt for dealing with the consequences of the Housing Finance Act.
I say categorically that I deplore the action of the Clay Cross councillors and the other councillors throughout the country in choosing to disobey the law as it was clearly laid down. It is at present overwhelmingly necessary in a country where the democratic machinery is working to adhere to the law and for the consequences of not doing so always to be more severe than the consequences of doing so, however much one may deplore that law. My borough council faced the problem and, although it had great misgivings, it decided, I am glad to say, to adhere to the law.
It is utterly to be deplored when any politician pretends to hold out the hope of absolution for transgressions of the law in the future. No hon. Member is entitled to say that his Government or the House of Commons will be prepared to pass legislation which will confer that absolution for acts done or to be done. However, the question is whether the particular circumstances of the Housing Finance Act and its consequences are quite as simple as to fit into the principles I have just enunciated.
It sticks in my craw to hear the excitable speeches from the Opposition, to which we have not been treated today but which we heard on Second Reading, which suggested that it is a fundamental principle of this country, always applied, that when a public official—using that word generally to include Ministers—trangresses the law and by so doing places a burden on public funds, he is always made to answer for it out of his

own pocket. That is not the case, and it ought to stick in the craw of the hon. Member for Aylesbury (Mr. Raison) to claim that it does.
If I remember correctly, the hon. Member had some peripheral connections with Northern Ireland affairs in the last Conservative Government. He might recognise the parallel which I propose to draw. I do not propose to go in detail into the matter of interrogation in Northern Ireland in the period between 1971 and 1973 because that would be out of order. However, I intend to refer to it for its relevance to what is before us here. Here we are considering the sanctions which we, the national authority, should apply against representatives in local authorities who defy the law and impose a burden on public funds.
It is, therefore, relevant to consider how the House deals with its own. What do we do in respect of a member of the executive at national level who transgresses the law or who is in charge when the law is transgressed and condones, positively or by his admission, activities which result in public expenditure? I refer, of course, to the fact, which perhaps many hon. Members have not picked up, that no less than £90,500 has so far been spent by way of compensation to people in Northern Ireland who were victims of what was euphemistically called "interrogation in depth"—that is, torture.
I will not go into the argument whether it is torture because I have the authority of the former Lord Chief Justice of England for condemning the actions as illegal, which is all that matters for this purpose. [Interruption.] Hon. Members may put their own interpretation upon that. I refer hon. Members to page 14 of the report, where Lord Parker asserts:
The procedures were and are illegal.
More relevant to this clause, he says on page 13:
If any document or Minister had purported to authorise them, it would have been invalid because the procedures were and are illegal by the domestic law and may have also been illegal by international law.
We have had the case before us recently, to which surely in considering these matters in the Bill we must pay attention, of whether we have required the Minister who was responsible on that occasion to foot the bill for his transgressions.

Mr. Kenneth Lewis: The Minister did not know about it.

Mr. Cunningham: The hon. Member for Rutland and Stamford (Mr. Lewis) says that the Minister did not know about it. Alas, it is a worse offence to be the man in charge who does not make the inquiries and does not wish to know but commits acts of torture. That is as far as I want to go into the matter of substance. It is a clear parallel. If we are not prepared to make Ministers at national level answer for the charges which their illegalities have placed upon public funds we might just hesitate for a moment before we conclude that making people pay for the financial consequences of their illegalities is a fundamental principle which ought to apply through all our proceedings.
When I read time and again the serials in the vendetta of Mr. Levin against the Attorney-General I wish he would turn his loquacious intellect to the subject matter that I have mentioned and call for Lord Carrington to pay out of his rather more ample pockets the £100,000 which his illegality has forced on public funds.
I have found it difficult to establish whether in law in this country Ministers are personally responsible, and can be personally sued for, the illegalities which they commit in the performance of their official functions. I am clear of only one thing as a result of my researches, and that is that the point is obscure. It looks to me as if it is possible for Ministers to be sued in this way.
That brings me to my next point which is more clearly relevant. The question is whether the responsibility for incurring this expenditure attaches exclusively to the councillors in question or is a shared responsibility. The answer is surely that it is a shared responsibility. The councillors were guilty of the initial breach of the law. But the extent of the financial consequences of that breach was the doing of the then Minister for Housing and Construction the right hon. Member for Brighton Pavilion (Mr. Amery). He was given by the Housing Finance Act the power to appoint a housing commissioner. He was given that quite clearly for a purpose.

Mr. Deputy Speaker: Order. I have been trying to follow the relevance to this clause of what the hon. Gentleman is saying. I know that he will quickly come to the point.

5.45 p.m.

Mr. Cunningham: When we are considering whether the relatively rigorous content of the new clause should apply rather than the relatively less rigorous content of the Bill as it is, it is surely relevant to consider the extent of the blame which attaches to the councillors in question and whether that blame attached only to them or was shared by other authorities, in this case another authority clearly under the control of the House. It is on that point that I want to dwell for a few seconds.

Mr. Stephen Hastings: Is it not a fact that the councillors concerned were continuously warned by officials of the council but took no notice? If that is the case, as reported in the Press, how can a higher authority be held to be responsible?

Mr. Cunningham: If the hon. Gentleman will pay me some attention I will try to explain. The Housing Finance Act conferred upon the Minister a power, not an obligation, to appoint a housing commissioner. It did not do that for fun. It did it for a clear, implied purpose, which was that if there was a local authority that was defying the Act Parliament wanted to ensure that by some substitute method that defiance could be curtailed and corrected. The question arises in the most extreme form when we ask whether the Minister could have been brought to book legally for not using the power which was conferred upon him by the statute.

Mr. Deputy Speaker: Order. We are straying very wide from the new clause. There will be plenty of opportunity for wider issues, as will be seen from the Order Paper. We must deal with the merits of the new clause and Amendments Nos. 14 and 15.

Mr. Cunningham: I would be approaching this matter in a very curious way if I did not think that it was relevant, in deciding to what extent we should apply these sanctions, to ask whether the


responsibility was shared with a Minister. These sanctions—

Mr. Deputy Speaker: Order. The hon. Gentleman just cannot do that. It is quite clear that this new clause, which the hon. Gentleman and the House will have read, does not deal with the Minister or his authority. I must ask the hon. Gentleman to confine himself to the new clause.

Mr. Cunningham: With the greatest respect, Mr. Deputy Speaker, I would ask you to consider this proposition. We are frequently talking about matters in debate when we have to envisage issues which are not referred to in words in the provision before us. We decide whether to make a provision as to such-and-such an effect and naturally—we would be failing in our duty if we did not—we bring in such considerations as are relevant in deciding whether that provision should be enacted. I suggest that it is relevant to the degree of rigour of the sanctions to ask whether the responsibility was exclusively confined to the councillors or was a shared responsibility between the councillors and the Minister. I can assure you, if it assists, that I have no intention of uttering more than a few sentences on this point. Indeed, I would probably have concluded by now had I been allowed to continue. I suggest that it is relevant to a consideration of these provisions—

Sir Raymond Gower: rose—

Mr. Cunningham: I have been enjoined by the Chair to be brief, and I never defy the Chair. I would be grateful if I could be allowed to develop my remaining few sentences in peace.
I suggest that it is arguable, on the basis of one case, which was Padfield v. the Minister of Agriculture in 1968, that the Minister could even have been required to exercise his functions under the statute to minimise the loss to public funds that would otherwise occur even though the statute gave him a power and did not impose upon him a requirement to exercise that power. I also suggest that if anyone had referred this case to the Parliamentary Commissioner—so far as I know, no one has done so—it is conceivable that the Parliamentary Commissioner would have ruled that there

was maladministration in the Minister's not exercising his powers. That is conceivable, because if he had done so the loss to public funds and the burden upon rents, rates or taxation would certainly have been less than it is now.

Sir Raymond Gower: Is it not a fact that it was clearly the case at the time that there was an alternative power and that the Minister, in exercising his judgments as to which power to use, also had to consider which power would be more effective in all the circumstances of the case?

Mr. Cunningham: It is obvious that the Minister's decision was not effective in minimising the cost. If the Minister had intervened in the manner permitted to him, and almost enjoined upon him, by the Act, the non-collected revenue would have been enormously less than the deficiency which resulted. Those two points persuade me that it was a shared responsibility.
First, it is arguable that the Minister could have been legally compelled to intervene if somebody had taken a case on the basis that I have described. Secondly, the Parliamentary Commissioner could well have ruled that it was maladministration on his part not to exercise his powers. If that is the case—

Mr. Lawrence: The point that the hon. Gentleman is making is utterly fallacious. It is the very point that was taken to the Court of Appeal by the Clay Cross councillors in one of the stages of their developing opposition. It is the very point that was dealt with by the court when it held that the Minister's action in this regard was perfectly lawful.

Mr. Cunningham: I have told the supposedly learned hon. Gentleman before that I am always moved to wonderment by the errors committed on these matters by those who have acquired a legal education. As I understand it, all that was at issue in the legal proceedings was whether the surcharge was correct and whether it should be enforced. I do not think that the court had any right to inquire whether the Minister could or should have exercised his functions. That is a separate question to which the House will address itself when deciding how


complete the responsibility of the councillors is in this matter.
I persuade myself rather reluctantly on the grounds that I have brought forward that the responsibility is a shared responsibility. Therefore, the situation is as messy as we all know it to be. In those circumstances, but not in any normal circumstances, it is right on this occasion to use this unusual legislative device to wipe the slate clean.

Mr. Ian Percival: I am obliged to the hon. Member for Islington, South and Finsbury (Mr. Cunningham) for the few observations that he made on the new clause, which were wholly favourable to it. I hope that he will forgive me if I do not take up all the other matters that he raised, their connection with this matter being rather slender. I hope also that neither the hon. Gentleman nor the House will allow themselves to be distracted from the issue raised by the new clause by the very many other interesting subjects. I am not trying to belittle them; they are interesting matters. On some of them I think that the hon. Gentleman was wrong. My hon. Friend the Member for Burton (Mr. Lawrence) referred to one such matter. Of course there are matters of substance to be followed up in another context.
I hope that the House will want to come to a decision fairly quickly on the new clause. I appreciate what the hon. Gentleman said about the new clause. I hope that he and others will appreciate that what he said about it is a good argument for voting for it when the opportunity arises.
Anxious as I am to say something about the further speech of the Attorney-General and although it is a great temptation to follow him along many of the paths that he trod, I shall resist the temptation to be anything like as long as the right hon. and learned Gentleman. However, if he thinks that we feel any less strongly about this measure or any less strongly about his part in it, he is wrong. We feel equally strongly about both as we ever have done.
The Attorney-General was seeking in his opening observations to suggest that there is not much difference between us now that we have tabled the new clause, That is either disingenuous or downright

misleading. There is still the world of difference between us, and I cannot believe that the Attorney-General does not see it.
As it stands, the Bill relieves indiscriminately and from all penalty, be it financial or disqualification, an unknown quantity of unknown persons, all of whom will have so defied the law that the already generous provisions for relieving them will not suffice. That is why it is necessary to have this legislation. It relieves those concerned of all penalty and it deprives the public of all protection from a repetition of similar conduct.
I suggest to the Attorney-General and to the House that there is the world of difference between a Bill which does that and a Bill which would do what this Bill would do if the new clause were added to it. The new clause preserves penalties both financial and by way of disqualification, but accepts that in the circumstances of the situation relating to events following upon defiance of the Act there may be call to deal with the particular situation in a particular way. We are absolutely and fundamentally at odds with the Government because we say that it is totally wrong to do what Clause 1 does. Clause 1 does a hundred times as much as Clause 4 by relieving all the councillors who, despite the generous terms of the present law, would still be liable to be penalised. It relieves them of all those penalties and does not substitute any other kind of penalty.
How did the Attorney-General seek to persuade the House that it should not accept the new clause? I suggest that he did so by putting forward a series of totally specious arguments about the clause. There would be no difficulty in operating the clause if it were introduced. As my hon. Friend the Member for Aylesbury (Mr. Raison) has said, it would dispose of the whole matter a good deal quicker than what is proposed by the Government. The Attorney-General has spoken about an endless series of cases going to the courts. So far as we know, there are a total of about 400 councillors and about 12 councils, so there are possibly 12 cases to be dealt with by the courts. That is not a high price to be paid for finding the right solution.
I suggest to the Attorney-General that the arguments he has advanced directed


to the clause are totally unconvincing. The clause would provide a simple way of dealing with the matter, a way which would remove all the political angle. One of the troubles with the way in which the Government are proceeding is that they will lay themselves open to the suggestion—and many feel that it is much more than a suggestion—that this is a political party safeguarding its political friends. The simple way to avoid that is to take it out of the political arena and put it into an arena in which the persons concerned are well versed and well experienced in dealing with situations like this. Why not do ourselves the favour of taking out some of the political heat? It is nonsense to say that this is a complex, prolonged and difficult procedure.

6 p.m.

Mr. David Weitzman: I am sure that the hon. and learned Gentleman appreciates that if the new clause were adopted the result would be that for many months and possibly years actions would go from court to court and to the House of Lords. It is ridiculous to talk about its being a simple measure.

Mr. Percival: I do not accept that. I am told that the number of councils is 18 rather than 12, but we do not know whether those 18 would have been surcharged or would be the subject of a rent loss certificate. In some cases it is still to be decided whether they are to be saved by the Newcastle amendment or by other considerations, but at the outset there are 18 to 20 cases. I do not accept that the procedure need take anything like as long as the hon. and learned Gentleman suggests, and I reject that argument.
In addition to taking this matter out of the political arena, the procedure we are putting forward has the further positive advantage of enabling those who are being dealt with to make representations to the court. That is a most important consideration. The Attorney-General's principal reason for rejecting the cause seems to be his reliance on the precedents to justify what is being done. I am astonished that he persists in that view and puts forward so many bad arguments in support of it. He even said that in many ways the background was similar. It could not have been more different.
If the right hon. and learned Gentleman will look at the cases as I have done, he will find that it was accepted by the district auditor and by the courts at all stages that the Poplar councillors genuinely believed that what they were doing was permitted by law.

Mr. Weitzman: Rubbish.

Mr. Percival: The hon. and learned Gentleman should not from a sedentary position say "rubbish".

Mr. Weitzman: rose—

Mr. Percival: No. The hon. and learned Gentleman cannot get up until I have finished. The facts to which I refer come from the cases.

Mr. Weitzman: I should not have said "Rubbish", I should have said "Entirely misconceived". In Committee I gave the hon. and learned Gentleman chapter and verse showing that he was completely wrong in what he said.

Mr. Percival: The hon. and learned Gentleman knows what I think of the so-called chapter and verse he gave me. It is not nearly as good as the chapter and verse I have quoted. I can only invite hon. Members to look for themselves.

The Attorney-General: I should like to know precisely how the hon. and learned Gentleman puts this point. It is right that the matter out of which the 1927 Bill originally grew was the audit of 1920–1921, which subsequently was the subject of the House of Lords decision and then the Dore decision. Does not the hon. and learned Gentleman agree that I am right in saying that by amendment of the Bill as it went through Parliament the Government of the day enabled themselves to remit surcharges for the periods 1925–1926, 1926–1927 and 1927–1928, which was long after that time and long after the House of Lords decision?

Mr. Percival: No, I do not accept that, and I shall give my references. If interventions are to be of this length, I shall have to decline to give way, put forward my propositions, sit down and invite the House to vote.
The Attorney-General talked of defiance. How many right hon. and hon. Members have compared the different


kinds of law breaking? In the Poplar case the argument was whether the councillors were breaking the law when they paid wages which were higher than the norm—and not all that much higher. They were relying on an Act which said that they could pay such wages as they thought fit. The question was how wide that discretion went. It was a difficult question of law. At all stages it was accepted that the people concerned did what they did in the belief that they were entitled to do so.
This case is totally different. In this case, councillors refused to carry out the mandatory requirements of Parliament, refused to collect stipulated increases and refused to give benefits to the least-well-off members of the population. The second case is properly called defiance and the first is not.
The Attorney-General said that the Bill was amended time and again to bring about further remissions. It was not. The proviso of which he spoke has nothing to do with the remission of penalties. It relates to disqualification. In the first instance, the Bill provided that nobody should be liable to disqualification in respect of something done before April 1927. That date was changed to 31st October because the passage of the Bill took longer than was expected and everyone agreed that it would be wrong to make a person liable to be disqualified in respect of an act done when he had no reason to suppose that it might attract that penalty.
Section 2 (6), to which the Attorney-General referred, is limited specifically to the cases which had already been brought before the court. In relation to those cases there was a particular difficulty. Everyone, including the Minister, had thought until 14th February 1927 that even if the court declined to act in those cases the Minister could remit. It was decided that that belief shared by everyone was wrong. Therefore, the persons who had taken the course of referring the proceedings to the court in that belief found that they were denied one of the remedies which everyone thought they had, and something had to be done about it.
Section 4 merely refers to the date upon which the remaining provisions of the Act came into force. According to the report with which the Attorney-General's

officials have kindly supplied me, 31st October was introduced into Section 4 as well as Section 1 because the Labour Members of the Opposition said that the Act ought not to come into effect so early because there were still matters to be sorted out. The date of 31st October 1927 was chosen because Miss Lawrence informed the House that the Poplar council was having a meeting that night with a view to terminating the agreement it had with the trade union and getting the wages on to the right level. She said that to throw the agreement aside would cause resentment and that it would take three months to terminate it. The Conservative Minister said "So be it", and the time was extended until 31st October.

Mr. Weitzman: indicated dissent.

Mr. Percival: The hon. and learned Gentleman can wag his head as much as he likes, but it is here in black and white. I invite him not to get so excited but to read it.

The Attorney-General: The hon. and learned Member for Southport (Mr. Percival) has read the Act. Surely he cannot possibly deny the fact that the amendments which were made to Clause 4 on Report were amendments which saved the old law and thereby enabled the Minister to remit surcharges for 1926, and 1927—well after the House of Lords cases—of £17,000 in the case of Poplar for the first year and half of that sum for the second year because it covered only a half-year period. That was the intention, and that was, in fact, done.

Mr. Percival: The Attorney-General is right to the extent that the effect of the amendment was exactly as I have described. The new provision did not come into effect in relation to any act done before that date. That meant that any surcharges, other than those which had been taken to court already and which are dealt with in Section 2(6), would remain to be dealt with under the law as it then stood. I would remind the Attorney-General that under the law as it then stood the only power of remission was contained in Section 4 of the Public Audit Act 1848. Under Section 4 of that Act the Minister could remit only if, in the circumstances, it was fair and equitable to do so. That was subject to review by the courts, as was made clear in the judgment in the case of Dore.
What the Bill is doing here is quite different. We are taking all of this right out of the law and right out of the courts' supervision and relieving everybody, regardless of what they did.
I want to make one other point on the question of precedents. The Attorney-General has said that the 1927 Act was the clearest precedent we could possibly have. I ask him to reconsider that in the light of what I am about to say. He said in Committee,
The purpose of the 1927 Act was to remit those surcharges which the Minster could not lawfully remit, as a result of the Dore case, by executive act, because there had been an appeal to the court in relation to such surcharges."—[Official Report, Standing Committee D, 15th April, 1975; c. 95.]
It is so misleading. That was not the purpose of the Act at all. The purpose was to introduce a new penalty and a new safeguard for the public—namely, disqualification.
When the Minister, in introducing the 1927 Act, referred to the question of surcharges which had already been referred to the court, he did so only towards the end of his speech, when, after having explained the purposes of the Bill, he said,
It only remains to consider what is to happen in the cases of surcharge which either are before the Courts or have been decided actually by a Court—the cases of Poplar, Bethnal Green and Woolwich I have already mentioned."—[Official Report, 15th June 1927; Vol. 207, c. 1033.]
It is so misleading to say that the purpose of the Act was to remit these surcharges.
I shall close with these further quotations which will show the House, in the words of the Minister in charge at the time, what the purpose of that Act was and the extent, if any, to which it was a precedent. Mr. Neville Chamberlain concluded his Second Reading speech in these words:
It must be clear that no member of a local authority who is doing his duty within the powers given to local authorities by Parliament has anything to fear from the operation of this Bill. The only people at whom this Bill is aimed are those people, if there be any such, who wish to go further than the law allows them, and who wish to set up a counter authority to Parliament."—[Official Report, 15th June 1927; Vol. 207, c. 1034.]

6.15 p.m.

Mr. Weitzman: Will the hon. and learned Gentleman give way?

Mr. Percival: No. Towards the end of his Third Reading speech, the Minister said this:
The fact is that, in practice, there will not arise any serious doubts in the future as to what is or is not likely to bring such a surcharge as would disqualify a member of a local authority from service for five years. I think no man who takes reasonable care, who understands his business and responsibilities, need be the least afraid of any dire consequences resulting from this Bill. No one who can show that his action was reasonable, or that, in his belief, it was justified, will be disqualified, and if he can show that he ought fairly to be excused, apart from the disqualification the surcharge itself will be remitted. On the other hand, those who cannot show either that their action was reasonable or that they thought they were acting in a justifiable manner, that is to say, those who must admit
—as all the councillors here must admit—"
that they were deliberately and intentionally acting in defiance of the law, cannot be fairly excused from the surcharge, and ought to be taken out of the local administration of this country."—[Official Report, 13th December 1927; Vol. 211, c. 2124–25.]
The purpose of the 1927 Act was the exact opposite of the purpose of this Bill, which is to relieve these persons of the very consequences which the 1927 Act was intended to visit upon them, particularly in circumstances such as those which obtain here.

Mr. Weitzman: Will the hon. and learned Gentleman give way?

Mr. Percival: No I shall not. It is deplorable that the Attorney-General should persist in relying upon such argument that the one Act is a precedent for the other. I invite the House to vote infavour of this new Clause.

Mr. Weitzman: rose—

Mr. Deputy Speaker: I think the House is ready to come to a decision.

Mr. Weitzman: I shall detain the House for only one minute because I do not think that the hon. and learned Member for Southport (Mr. Percival) ought to try to get away with remarks such as he has made. Nobody said that the purpose of the 1927 Act was to remit surcharges. He has repeatedly said that as if we had put that argument forward. We did not say that. What we said was


that the effect of that Act, by extending by amendment to the end of October—

Mr. Percival: rose—

Mr. Weitzman: No, I shall not give way. The hon. and learned Gentleman would not give way to me. Why should I not return the compliment?
I want to make it quite clear that the effect of the 1927 Act was that by an amendment made later there was a remission of surcharges to the end of October. That meant a remission of surcharges

where the councillors had deliberately defied the law. It is a perfectly clear precedent. The hon. and learned Gentleman can try as much as he likes to twist the words here and there, but he cannot get away from the fact that that was a real precedent on the part of a Tory Government.

Question put, That the clause be read a second time.

The House divided: Ayes 232, Noes 243.

Division No.203.]
AYES
[6.18 p.m.


Adley, Robert
Fraser, Rt. Hon. H. (Stafford &amp; St)
Lawson, Nigel


Aitken, Jonathan
Freud, Clement
Lester, Jim (Beeston)


Amery, Rt. Hon. Julian
Galbraith, Hon. T. G. D.
Lewis, Kenneth (Rutland)


Arnold, Tom
Gardner, Edward (S Fylde)
Lloyd Ian


Atkins, Rt. Hon. H. (Spelthorne)
Gilmour, Rt. Hon. Ian (Chesham)
Loveridge, John


Awdry, Daniel
Gilmour, Sir John (East Fife)
McAdden, Sir Stephen


Banks, Robert
Glyn, Dr. Alan
McCrindle, Robert


Beith, A. J.
Godber, Rt. Hon. Joseph
Macfarlane, Neil


Bennett, Sir Frederic (Torbay)
Goodhart, Philip
MacGregor, John


Benyon, W.
Goodhew Victor
McNair-Wilson, M. (Newbury)


Berry, Hon. Anthony
Goodlad Alastair
McNair-Wilson, P. (New Forest)


Biffen, John
Gorst John
Madel, David


Biggs-Davison, John
Gow, Ian (Eastbourne)
Marshall, Michael (Arundel)


Body, Richard
Gower, Sir Raymond (Barry)
Marten, Neil


Boscawen, Hon. Robert
Grant, Anthony (Harrow C.)
Mather, Carol


Bowden, A. (Brighton, Kemptown)
Gray, Hamish
Maude, Angus


Boyson, Dr. Rhodes (Brent)
Griffiths, Eldon
Maxwell-Hyslop, Robin


Braine, Sir Bernard
Grimond, Rt. Hon. J.
Mayhew, Patrick


Brittan, Leon
Grist, Ian
Miller, Hal (Bromsgrove)


Brotherton, Michael
Grylls, Michael
Miscampbell, Norman


Bryan, Sir Paul
Hall, Sir John
Moate, Roger


Buck, Antony
Hall-Davis, A. G. F.
Molyneaux, James


Budgen, Nick
Hamilton, Michael (Salisbury)
Monro, Hector


Bulmar, Esmond
Hampson, Dr. Keith
Montgomery, Fergus (Ludlow)


Burden, F. A.
Hannan, John
More, Jasper


Butler, Adam (Bosworth)
Harrison, Col. Sir Harwood (Eye)
Morgan, Geraint


Carlisle, Mark
Harvie Anderson, Rt. Hon. Miss
Morgan-Giles, Rear-Admiral


Carr, Rt. Hon. Robert
Hastings, Stephen
Morris, Michael (Northampton S.)


Chalker, Mrs. Lynda
Havers, Sir Michael
Morrison, Charles (Devizes)


Churchill, W. S.
Hayhoe, Barney
Morrison, Hon. Peter (Chester)


Clark, Alan (Plymouth, Sutton)
Heseltine, Michael
Mudd, David


Clark, William (Croydon S.)
Hicks, Robert
Neave, Airey


Clarke, Kenneth (Rushcliffe)
Higgins, Terence L.
Nelson, Anthony


Clegg, Walter
Hordern, Peter
Neubert, Michael


Cockcroft, John
Howe, Rt. Hon. Sir Geoffrey
Newton, Tony


Cooke, Robert (Bristol W.)
Howell, David (Guildford)
Nott, John


Cope, John
Howells, Geraint (Cardigan)
Onslow, Cranley


Cordle, John H.
Hunt, John
Oppenheim, Mrs. Sally


Cormack, Patrick
Hurd, Douglas
Page, Rt. Hon. R. Graham (Crosby)


Costain, A. P.
Hutchison, Michael Clark
Pardoe, John


Critchley, Julian
Irvine, Bryant Godman (Rye)
Parkinson, Cecil


Crouch, David
Irving, Charles (Cheltenham)
Pattie, Geoffrey


Crowder, F. P.
James, David
Penhaligon, David


Davies, Rt. Hon. J. (Knutsford)
Jenkin, Rt. Hon. P. (Wanst'd &amp; W'df'd)
Percival, Ian


Dodsworth, Geoffrey
Jessel, Toby
Peyton, Rt. Hon. John


Douglas-Hamilton, Lord James
Johnson Smith, G. (E Grinstead)
Prior, Rt. Hon. James


du Cann, Rt. Hon. Edward
Jones, Arthur (Daventry)
Raison, Timothy


Durant, Tony
Jopling, Michael
Rathbone, Tim


Eden, Rt. Hon. Sir John
Joseph, Rt. Hon. Sir Keith
Rees, Peter (Dover &amp; Deal)


Edwards, Nicholas (Pembroke)
Kaberry, Sir Donald
Rees-Davies, W. R.


Elliott, Sir William
Kellett-Bowman, Mrs. Elaine
Renton, Rt. Hon. Sir D. (Hunts)


Emery, Peter
Kershaw, Anthony
Ridley, Hon. Nicholas


Eyre, Reginald
Kilfedder, James
Ridsdale, Julian


Fairbairn, Nicholas
King, Evelyn (South Dorset)
Rifkind, Malcolm


Fairgrieve, Russell
King, Tom (Bridgwater)
Rodgers, Sir John (Sevenoaks)


Fell, Anthony
Kitson, Sir Timothy
Ross, Stephen (Isle of Wight)


Finsberg, Geoffrey
Knight, Mrs. Jill
Rossi, Hugh (Hornsey)


Fisher, Sir Nigel
Knox, David
Royle, Sir Anthony


Fletcher, Alex (Edinburgh N.)
Lane, David
Sainsbury, Tim


Fookes, Miss Janet
Langford-Holt, Sir John
St. John-Stevas, Norman


Fowler, Norman (Sutton C'f'd)
Latham, Michael (Melton)
Scott, Nicholas


Fox, Marcus
Lawrence, Ivan
Shaw, Giles (Pudsey)




Shelton, William (Streatham)
Stewart, Ian (Hitchin)
Wainwright, Richard (Colne V.)


Shepherd, Colin
Stokes, John
Wakeham, John


Shersby, Michael
Stradling Thomas, J.
Walker, Rt. Hon. P. (Worcester)


Silvester, Fred
Tapsell, Peter
Wall, Patrick


Sims, Roger
Taylor, R. (Croydon NW)
Wallters, Dennis


Sinclair, Sir George
Taylor, Teddy (Cathcart)
Warren, Kenneth


Skeet, T. H. H.
Tebbit, Norman
Weatherill, Bernard


Smith, Cyril (Rochdale)
Temple-Morris, Peter
Wells, John


Speed, Keith
Thatcher, Rt. Hon. Margaret
Whitelaw, Rt. Hon. William


Spence, John
Thomas, Rt. Hon. P. (Hendon S.)
Wiggin, Jerry


Spicer, Jim (W Dorset)
Thorpe, Rt. Hon. Jeremy (N Devon)
Winterton, Nicholas


Spicer, Michael (S Worcester)
Townsend, Cyril D.
Young, Sir G. (Ealing, Action)


Sproat, Iain
Trotter, Neville



Stainton, Keith
Tugendhat, Christopher
TELLERS FOR THE AYES:


Stanbrook, Ivor
van Straubenzee, W. R.



Stanley, John
Vaughan, Dr. Gerard
Mr. Richard Luce and


Steen, Anthony (Wavertree)
Viggers, Peter
Mr. Spencer Le Marchant.




NOES


Archer, Peter
Ennals, David
McElhone, Frank


Armstrong, Ernest
Evans, Gwynfor (Carmarthen)
MacFarquhar, Roderick


Ashley, Jack
Evans, Ioan (Aberdare)
Mackenzie, Gregor


Ashton, Joe
Evans, John (Newton)
Maclennan, Robert


Atkins, Ronald (Preston N.)
Ewing, Harry (Stirling)
McMillan, Tom (Glasgow C.)


Atkinson, Norman
Faulds, Andrew
McNamara, Kevin


Bagier, Gordon A. T.
Fitt, Gerard (Belfast W.)
Madden, Max


Barnett, Guy (Greenwich)
Flannery, Martin
Mahon, Simon


Barnett, Rt. Hon. Joel (Heywood)
Fletcher, Raymond (Ilkeston)
Mallalieu, J. P. W.


Bates, Alf
Fletcher, Ted (Darlington)
Marks, Kenneth


Bean, R. E.
Foot, Rt. Hon. Michael
Marquand, David


Bennett, Andrew (Stockport N.)
Ford, Ben
Marshall, Dr. Edmund (Goole)


Bishop, E. S.
Forrester, John
Marshall, Jim (Leicester S.)


Blenkinsop, Arthur
Fowler, Gerald (The Wrekin)
Mason, Rt. Hon. Roy


Boardman, H.
Fraser, John (Lambeth, N'w'd)
Maynard, Miss Joan


Booth, Albert
Freeson, Reginald
Meacher, Michael


Bottomley, Rt. Hon. Arthur
Garrett, John (Norwich S.)
Mellish, Rt. Hon. Robert


Bray, Dr. Jeremy
Garrett, W. E. (Wallsend)
Mendelson, John


Brown, Hugh D. (Provan)
George, Bruce
Mikardo, Ian


Brown, Ronald (Hackney S.)
Ginsburg, David
Millan, Bruce


Buchanan, Richard
Golding, John
Miller, Mrs. Millie (Ilford N.)


Butler, Mrs. Joyce (Wood Green)
Gould, Bryan
Mitchell, R. C. (Solon, Itchen)


Callaghan, Rt. Hon. J. (Cardiff SE)
Gourley, Harry
Molloy, William


Callaghan, Jim (Middleton &amp; P)
Graham, Ted
Moonman, Eric


Canavan, Dennis
Grant, John (Islington C.)
Morris, Alfred (Wythenshawe)


Cant, R. B.
Grocott, Bruce
Morris, Charles R. (Openshaw)


Carter, Ray
Hamilton, James (Bothwell)
Morris, Rt. Hon. J. (Aberavon)


Carter-Jones, Lewis
Hamilton, W. W. (Central Fife)
Moyle, Roland


Cartwright, John
Harrison, Walter (Wakefield)
Murray, Rt. Hon. Ronald King


Castle, Rt. Hon. Barbara
Hart, Rt. Hon. Judith
Noble, Mike


Cocks, Michael (Bristol S.)
Hattersley, Rt. Hon. Roy
Oakes, Gordon


Coleman, Donald
Hatton, Frank
O'Halloran, Michael


Concannon, J. D.
Healey, Rt. Hon. Denis
O'Malley, Rt. Hon. Brian


Conlan, Bernard
Heffer, Eric S.
Orbach, Maurice


Cook, Robin F. (Edin C.)
Hooley, Frank
Ovenden, John


Corbett, Robin
Horam, John
Owen, Dr. David


Cox, Thomas (Tooting)
Howell, Denis (B'ham, Sm H.)
Palmer, Arthur


Craigen, J. M. (Maryhill)
Hughes, Rt. Hon. C. (Anglesey)
Park, George


Crosland, Rt. Hon. Anthony
Hughes, Mark (Durham)
Parry, Robert


Cryer, Bob
Hughes, Robert (Aberdeen N.)
Peart, Rt. Hon. Fred


Cunningham, G. (Islington S.)
Hughes, Roy (Newport)
Pendry, Tom


Cunningham, Dr. J. (Whiteh)
Hunter, Adam
Phipps, Dr. Colin


Davidson, Arthur
Jackson, Colin (Brighouse)
Prentice, Rt. Hon. Reg


Davies, Bryan (Enfield N.)
Janner, Greville
Prescott, John


Davies, Denzil (Llanelli)
Jay, Rt. Hon. Douglas
Price, C. (Lewisham W.)


Davis, Clinton (Hackney C.)
Jenkins, Hugh (Putney)
Radice, Giles


Deakins, Eric
John, Brynmor
Rees, Rt. Hon. Merlyn (Leeds S.)


Dean, Joseph (Leeds West)
Jones, Alec (Rhondda)
Richardson, Miss Jo


de Freitas, Rt. Hon. Sir Geoffrey
Jones, Barry (East Flint)
Roberts, Albert (Normanton)


Delargy, Hugh
Kaufman, Gerald
Robertson, John (Paisley)


Dell, Rt. Hon. Edmund
Kerr, Russell
Roderick, Caerwyn


Doig, Peter
Kilroy-Silk, Robert
Rodgers, George (Chortey)


Dormand, J. D.
Lamborn, Harry
Rodgers, William (Stockton)


Douglas-Mann, Bruce
Lamond, James
Rooker, J. W.


Duffy, A. E. P.
Lawson, Nigel
Roper, John


Dunn, James A.
Leadbitter, Ted
Rose, Paul B.


Dunnett, Jack
Lee, John
Ross, Rt. Hon. W. (Kilmarnock)


Dunwoody, Mrs. Gwyneth
Lestor, Miss Joan (Eton &amp; Slough)
Ryman, John


Eadie, Alex
Lever, Rt. Hon. Harold
Sandelson, Neville


Edelman, Maurice
Lomas, Kenneth
Sedgemore, Brian


Edge, Geoff
Lyon, Alexander (York)
Selby, Harry


Edwards, Robert (Wolv SE)
Lyons, Edward (Bradford W)
Shaw, Arnold (Ilford South)


Ellis, John (Brigg &amp; Scun)
Mabon, Dr. J. Dickson
Sheldon, Robert (Ashton-u-Lyne)


English, Michael
McCartney, Hugh
Shore, Rt. Hon. Peter







Short, Mrs. Renée (Wolv NE)
Thomas, Jeffrey (Abertillery)
Wellbeloved, James


Silkin, Rt. Hon. John (Deptford)
Thomas, Mike (Newcastle E.)
White, James (Pollak)


Silkin, Rt. Hon. S. C. (Dulwich)
Thomas, Ron (Bristol NW)
Whitehead, Phillip


Sillars, James
Thorne, Stan (Preston South)
Whitlock, William


Silverman, Julius
Tierney, Sydney
Willey, Rt. Hon. Frederick


Skinner, Dennis
Tinn, James
Williams, Alan (Swansea W.)


Small, William
Tomlinson, John
Williams, Alan Lee (Hornch'ch)


Smith, John (N Lanarkshire)
Tomney, Frank
Williams, W. T. (Warrington)


Snape, Peter
Torney, Tom
Wilson, Alexander (Hamilton)


Spearing, Nigel
Urwin, T. W.
Wilson, William (Coventry SE)


Stallard, A. W.
Varley, Rt. Hon. Eric G.
Wise, Mrs. Audrey


Stewart, Rt. Hon. M. (Fulham)
Wainwright, Edwin (Dearne V.)
Woof, Robert


Stoddart, David
Walker, Harold (Doncaster)
Wrigglesworth, Ian


Stott, Roger
Walker, Terry (Kingswood)
Young, David (Bolton E.)


Strang, Gavin
Ward, Michael



Strauss, Rt. Hon. G. R.
Watkins, David
TELLERS FOR THE NOES:


Summerskill, Hon. Dr. Shirley
Watkinson, John
Miss Margaret Jackson and


Swain, Thomas
Weetch, Ken
Mr. Joseph Harper.


Taylor, Mrs. Ann (Bolton W.)
Weitzman, David

Question accordingly negatived.

Clause 1

SURCHARGES ARISING OUT OF HOUSING FINANCE ACT 1972

6.30 p.m.

The Under-Secretary of State for the Environment (Mr. Gerald Kaufman): I beg to move Amendment No. 1, in page 2, line 4, leave out from 'applied' to end of line 6 and insert:
'the district auditor shall certify the sum which and the persons whom he surcharged in respect of it'.

Mr. Deputy Speaker (Mr. George Thomas): With this Amendment we may discuss the following Amendments:
No. 2, in page 2, line 4, leave and from 'certificate' to end of line 6 and insert:
'shall be issued by the district auditors certifying the amount of such loss of rent and the persons whom he has surcharged in respect of the said loss'.
No. 4, in page 2, line 8, leave out from 'or' to second subsection in line 9.
We may also discuss Government Amendment No. 3.

Mr. Kaufman: We introduce these Amendments in response to an Opposition amendment on similar lines suggested in Committee, which I undertook to consider. We are grateful for having had our attention drawn to possible obscurities in these subsections as originally drafted. We are satisfied that these amendments entirely clarify the points made in Committee.
The only point of difference between the effect of these amendments and those put down by the Opposition in Committee is that we have not thought it necessary

to impose a time limit on the issue of a rent loss certificate by the district auditor. Both the district auditor and the council will be eager to close the accounts, and we are quite satisfied that they will move speedily without the need for a set limit.

Mr. Percival: The Government are being remarkably obstinate in relation to most important parts of this Bill. I am very glad to see that they have accepted the sense of doing this, and I appreciate the Minister's generosity in drawing attention to the fact. We are happy to see it and shall not press our own amendment. That comment applies also to Government Amendment No. 3.

Amendment agreed to.

Amendment made: No. 3, in page 2, line 8, leave out from '(2)' to '(3)' in line 9 and insert 'or'.—[Mr. Kaufman.]

Clause 2

RECOVERY OF CERTIFIED AMOUNTS

Mr. Raison: I beg to move Amendment No. 5, in page 2, line 29, leave out subsection (1) and insert:
'(1) A council who on the 1st April 1974 held any dwellings to which a rent loss certificate relates shall recover the sum certified therein or the appropriate part of it as hereinafter defined by 1st April 1977'.

Mr. Deputy Speaker: With this Amendment, it may be convenient to take the following Amendments:
No. 7, in page 2, line 36, leave out subsection (2).
No. 8, in line 39, leave out subsection (3) and insert:
'() A council shall perform their duty under this section by a general increase of the rents


of those of their housing revenue account dwellings in the part or parts of their area to which the certificate relates; and a council may make any such increase notwithstanding section 111 of the Housing Act 1957 (charges for local authority's houses)'.
No. 9, in line 40 leave out 'either'.
No. 10, in line 42, leave out from 'relates' to 'and' in line 44.
No. 11, in page 3, line 1, leave out, subsection (4) and insert:
'() On the application of a council to whom this section applies the Secretary of State may by statutory instrument make an order substituting for the date "1st April 1977" in subsection (1) above such other date not being later than the 1st April 1978 as he may in the order specify; and any such order shall be subject to affirmative resolution of both Houses of Parliament'.
No. 17, in Clause 3, page 3, leave out lines 17 to 28 and insert:
'may elect to charge the sum which it would otherwise fall to them to recover under section 2 above either wholly or partially to their general rate fund but any sum so charged shall be chargeable and charged by them separately on the area of any former council to whose account the rent loss certificate relates and only on such area'.
No. 18, in line 19, leave out from 'and' to 'shall' in line 21 and insert:
'any sum charged to their general rate fund by virtue of this paragraph'.
No. 19, in line 22, after 'chargeable', insert 'and charged by them'.

Mr. Raison: These amendments have been grouped together because they are all concerned with the process of recovering money that was not collected as a consequence of the failure to implement the Housing Finance Act. They cover three very important but to some extent separate points.
Amendments Nos. 5, 7 and 11 are concerned with the rate or time-scale of recovery of the money that was not collected. Amendment No. 8 is concerned with the possibility that council tenants who were not in the area which benefited from non-implementation might still have to pay. Amendment No. 17 is concerned with the parallel possibility that ratepayers who were not in the area that benefited might also have to pay.
I make my remarks on this group of amendments in three stages, and I begin with Amendments Nos. 5, 7 and 11. Instead of allowing recovery to take place over a period of five years, Amendment

No. 5 states that the uncollected money shall be recovered by 1st April 1977. Backing this up, Amendment No. 7 deletes the five-year recovery period. The later amendment, No. 11, gives the possibility of an additional year's grace.
We welcome the Government's view that the money that was not collected in the form of rent as a result of the defiance of the Act should come from the relevant community. We welcome the principle set forth by the Secretary of State as being that which underlies the Government's approach. It is right that the taxpayer should bear none of the burden for the failure to implement the Act. So far as we can judge, the Bill at least sticks to that undertaking. But the very important effect of our amendment would be to give councillors from the time of the Act becoming law until the 1st April 1977 to recover the money. Depending on the date at which this Bill might receive the Royal Assent—and we hope that it will not—this could allow a period of well over a year and a half for the moneys to be recovered.
Anybody not knowing the facts which emerged in Committee would regard this period of about a year and a half for recovery to take place as very reasonable. After all, it is a greater period than the period of operation of the Housing Finance Act, and therefore of the possible period of default. One cannot have added to one's rent or rates more money than was not collected during the period when the law was being defined. Therefore, I suggest that the five-year recovery period which the Bill allows, even at a superficial glance, is quite excessive.
I emphasise again, as in the last debate, that the corollary of a five-year period of recovery will be a prolonged period of grievance. The sense of grievance that is felt and will be felt by those who are having to pay because of the dereliction of duty of the councillors will last for the whole of that five-year period and will make nonsense of the Government's claim that this Bill is a way to wipe the slate clean.
It is also quite unnecessarily favourable to have this period, in that if a council chose to spread out the collection of money over five years it would be collecting far less in real terms than if it were to collect the money in the near future


The value of money is falling the whole time and the pound collected in five years' time will, alas, be worth very much less than a pound collected today. It is a straight economic incentive to local authorities to delay the collection of money. The longer they delay it, the less money in real terms they will have to collect. I see no suggestion in the Bill of any interest charge being made on the money to be collected, the collection of which could be delayed.
What really persuaded my right hon. Friends and myself that a five-year period of recovery was totally and utterly unnecessary—indeed, even ridiculous—was the table produced to the Committee so helpfully by the Under-Secretary.
This table—I say this for the benefit of those who were not in the Committee—set out the estimates, derived from the information available within the Department of the Environment, of potential increases if recovery were spread out over the defaulting areas only over a five-year period—for example, taking the North Derbyshire case, confined only to the old Clay Cross area, rather than being spread out over the whole of the North-East Derbyshire District Council. The table gave both the average weekly rent increase and the annual average rate poundage increase for the 18 authorities, which we understand are being audited at the moment in connection with this Bill.
What was so striking about the table was that the sums it showed were so extraordinarily small. They did not begin to justify the need for a five-year period for repayment. The authorities were not named in the table, for reasons which we understand, but I hope that hon. Members interested in this argument will seize the opportunity to look at the facts set out therein. I will quote one or two of them. In the column devoted to average weekly rent increases—the amount of rent that would have to be collected if recovery were made over the defaulting area only over the five-year period—we see average weekly rent increases of 5p, 3p, 4p, 9p, 2p, and so on. In other words, the sums, if spread over a five-year period, are on a very small scale indeed.
Exactly the same applies to the average rate poundage increase, where the sums are 0·25p, 0·15p, 0·05p, and so on. There

arc one or two exceptions. One is quite a bit larger. But, on the whole, the amount to be collected is pitifully small in relation to a five-year period of recovery.
What would happen if the whole rent loss were to be recovered in one year? In terms of rate poundages, in one authority it would yield only 0·25p in the pound, in six authorities it would yield only 0·5p, and in only two authorities would the increase spread over five years mean more than 1p in the pound on the rates.
For the purposes of this debate, it is easier to see the scale of the problem in the estimated rent increases. One authority would need to impose only a 5p a week increase for repayment in one year. What possible argument can there be for allowing this to be spread over five years? All except four authorities could recover the payment by a 25p a week increase spread over one year only. Of the four which are larger sums, one would need a 30p a week increase for a year, one a 35p increase, and one a 45p increase for one year. There is only one substantial one, which the Under-Secretary gave us to understand was Clay Cross, where the figure is 27p a week over five years, which is equal to a 135p a week increase over one year.
Our scheme would not allow only a year but would make possible about one and a half years. So all the figures that I have given for a one-year period would need to be reduced by a third.
These figures demolish utterly the case for spreading the recovery payment over up to five years. To do so is deeply offensive to the law abiding, especially those in the areas where the money has to be raised. But, although there is no need for this long period for recovery and although the date which we propose of April 1977 seems adequate by any standards, nevertheless in Amendment No. 11 we make possible a further extension of one year. We say, in other words, that in certain circumstances the period for recovery could be stretched to April 1978 where a council applied to the Secretary of State for such an extension and could justify its case. Our amendment suggests that the Secretary of State would then be able to make a statutory instrument extending this up to the date of 1st April 1978.
In the most substantial case, which we take to be Clay Cross this would mean a rate of recovery of about 60p-odd a week. By any standards that is not an inordinate burden to fall on the community which benefited most from non-collection.
6.45 p.m.
I believe that it is right that this extension should be subject to parliamentary control. We are talking about an act of defiance of the laws of Parliament. Therefore, we propose that Amendment No. 11 should require the affirmative procedure of this House to make sure that the House agreed to the proposals of the Secretary of State.
Once again the arguments on all this are rooted in common sense. There is nothing dogmatic or extreme in our approach. It is a common sense approach to the problem.
I turn to Amendment No. 8 which deals with the burden which it would be possible to impose on council tenants. The effect of it is that where a council opts to recover money through council rent increases, it may do so only by raising rents in the areas to which the certificate relates. Our amendment would not permit councils to raise the rents of council tenants who did not form part of what the Secretary of State described on 6th November 1974 as the communities which "benefited from late implementation".
It is clear that those communities which benefited from late implementation can mean only the areas of the old local authorities where defiance of the law took place. In the case of Clay Cross and possibly others where this problem has arisen, the old authorities have been merged subsequently in the new enlarged authorities created under the Local Government Act 1972.
Is not it a complete travesty of words or sense to say that a community which benefited could be the new enlarged local authority rather than the old small local authority where defiance of the law took place? It is a complete travesty to make it possible that all the council tenants of the new authority of North-East Derbyshire should have to bear the burden of repaying the money which was not collected by the councillors of the old Clay Cross areas, a fact which

benefited only those who live in those areas.
I find it astonishing that a Labour Government, of all Governments, should even contemplate the possibility that council tenants outside the areas which benefited from defiance of the law should have to bear this burden. I cannot understand how Government supporters, who constantly talk of their interest and concern for council tenants, could agree to the Government's proposition. As I said in Committee, when I recall the wrath and indignation—whether simulated or real, I do not know—which we heard from Labour Members about the possibility under the Housing Finance Act that council tenants might have to support other council tenants in other areas or other council tenants in their own areas out of their rents, I cannot conceive how today they can support the proposal that council tenants who derived no benefit from non-implementation should now bear the burden on behalf of their fellow men.
It is tragic, incidentally, that at this stage we should have so few Government supporters present. This matter must touch them closely. I have no doubt that there is concern among them. I hope that it will be expressed when we press this amendment to a Division.
Let me ask the hon. Member for Derbyshire, North-East (Mr. Swain) why council tenants in the rest of North-East Derbyshire should be liable to pay for the keeping down of rent increases in the Clay Cross area. How can this be justified? They had no part in the electing of the rebel councillors.

Mr. Swain: Is the hon. Gentleman aware that, when this Bill becomes law, it will be the responsibility of the local authority to decide, yea or nay?

Mr. Raison: I accept that it will be the responsibility of the local authority to decide, yea or nay, but I can see no reason why this possibility should be open to it. I can see no justification in logic, honour or anything else for this provision to be in the Bill. I hope that the hon. Gentleman will recognise that and vote with us at least on this clause—[Interruption.] I suggest that the hon. Gentleman should listen to his councillors—

Mr. Swain: I was there this morning.

Mr. Raison: Then he should listen to his own Labour leader—

Mr. Swain: Will the hon. Gentleman give way?

Mr. Raison: No.

Mr. Swain: I thought not. The hon. Gentleman will not give way because he knows that he is telling a lie.

Mr. Speaker: Order. That word is not allowed.

Mr. Swain: On a point of order, Mr. Speaker. If a man tells a lie, what are we to say to him—"Thank you very much"? I say that the hon. Gentleman is telling a diabolical lie.

Mr. Speaker: The hon. Member for Derbyshire, North-East (Mr. Swain), who has been in the House a long time, must help me. He knows that that is a word that I am not allowed to permit. He may say that what the hon. Member for Aylesbury (Mr. Raison) said was inaccurate or was not in accordance with the facts, but I cannot permit the word "lie".

Mr. Swain: On a point of order, Mr. Speaker. A hell of a lot of words in this House are used that should not be used. Apparently Opposition Front Bench speakers have a certain licence to use them. I suggest that when it is pointed out that an hon. Member is telling an untruth, out of all respect to the hon. Member who reminds him of this and who does know the truth, he should give way to him so that the other hon. Member can tell him, or else he must incur the wrath of the hon. Member whom he is criticising.

Mr. Speaker: I hoped that we could settle this point without too much heat. I regret personal exchanges like this. Sometimes they are provoked, but I hope that the hon. Gentleman will withdraw the word "lie".

Mr. Swain: I withdraw the word "lie", Mr. Speaker, and apologise to all the liars in this country for bringing them down to the low level of the hon. Gentleman.

Mr. Speaker: In my discretion I shall construe that as an unreserved withdrawal.

Mr. Raison: The hon. Gentleman's blandishments to me to give way are not the most seductive that I have ever heard.

Mr. Swain: rose—

Mr. Raison: I will not give way to the hon. Gentleman. He can speak in the debate and put his point of view. I ask him and all Labour Members who may have more conscience and more sense than he has, why should it be possible that the ratepayer—

Mr. Swain: On a point of order, Mr. Speaker. The hon. Gentleman is now directly insulting me. No doubt there are other Labour Members who have more sense than I have, but no doubt there are a hell of a lot of Labour Members who have more sense than the hon. Gentleman.

Mr. Speaker: Order. Fortunately it is not for me to adjudicate on the amount of sense which hon. Members on either side of the House have. I suggest to the hon. Member for Aylesbury (Mr. Raison) that he should not be deliberately provocative. There is a bit of give and take in this House—[Interruption.] Order. The hon. Member is not helping me with his interventions from a sedentary position. I am doing my best to conduct this debate in an orderly way. I would hope that Members on either side would not be unduly provocative. Let us get on.

Mr. Raison: Why should the Bill make it possible for the ratepayers of North-East Derbyshire, as represented by their councillors, to be in a position to place the burden on innocent council tenants? I do not suppose that they will, but why should the possibility even exist? The Government have never advanced any good reason.
I have some sympathy for the tenants of Clay Cross and the comparable areas. I believe that they were very badly served by their councillors, but at least those who lived in the Clay Cross area derived some benefit. At least their rents were held down. However, the other council tenants outside these areas, in the new authorities, can only suffer if this option is implemented.
In Committee the Under-Secretary responded in the feeblest possible way to our arguments upon this point. He


talked of the possibility of tabling amendments on Report. He talked of the wish of the Government to extend, if possible, the range of options for repayment. We were not very interested in extending the range of options, because we did not think that was necessary. However, I am disappointed that the Under-Secretary has not seen fit to produce at least some recognition of the force of our argument. Perhaps I should qualify that by saying that it is still on the cards that he may accept our amendments. I hope that he will at least accept Amendment No. 8. We shall listen with great interest to what he has to say.
His hon. Friend the Member for Birmingham, Erdington (Mr. Silverman), who alas does not appear to be present, seemed to me to do more than the Under-Secretary to try to defend the Government on this clause. In effect, he said that we can leave all this to the good sense of councils. That may be so. It may well be that they will behave in a very sensible way. However, I cannot see why such a blatantly unfair option as the Bill allows should be permitted.
I remind the Under-Secretary that the hon. Member for Birmingham, Erdington said that he agreed that the clause was weak. I hope that all hon. Members will have the guts to join us at least in supporting Amendment No. 8, because they must know that both morally and in practical terms it is right.
I am glad that the Secretary of State has just arrived. I wish that he had heard a little more of this argument, because I believe it is one of the most important arguments that we are putting forward. I hope that the Under-Secretary will tell his right hon. Friend what we have been saying.
Finally, I turn to Amendment No. 17 which is the parallel amendment dealing with the position of the ratepayers in those areas outside the areas to which the rent loss certificates would apply. The effect that we seek here is the possibility that the burden of repaying sums which were not collected could fall only on the ratepayers of the area to which rent loss certificates attach and not on those parts of a new authority to which the certificates does not relate.
Again, the obvious example has to be North-East Derbyshire and Clay Cross. That is the only area where we can talk in anything remotely resembling concrete terms, but it may well be that the same situation would apply in other parts of the country.
Much the same arguments apply to this amendment as applied to the last one. As it happens, I feel particularly strongly about injustice to council tenants, about which I spoke under the last amendment, but there is no doubt that the injustice to ratepayers, which we are trying to remove by this amendment, would be just as great. There is no doubt that the ratepayers in North-East Derbyshire feel very strongly about this.
I am put in something of a dilemma by my desire to keep the peace and to live up to what you, Mr. Speaker, have just asked me to do. However, I cannot but refer at least to the point of view which was expressed very forcibly on 10th May—only last week—by the new North-East Derbyshire District Council which asked their Member of Parliament, apparentiy in vain, to call upon the Government not to proceed with the Housing Finance (Special Provisions) Bill.

Mr. Swain: I should like to make a correction. It was not a request from the council but a statement by the leader of the Tory Party in the council, followed by the lady who was retiring as chairman. No decision was made. No resolution was moved or seconded. No recommendation was made by the council and not one of the councillors—and I was in the room—told me of it. The first I heard about this was when I read the article by A. J. Travers on the front page of the Sunday Telegraph this week. Now will the hon. Gentleman believe me when I say that I was not reprimanded? If I am to take instructions from a dud lawyer from Dronfield, the leader of the Tories on that council, I shall go out of this House tomorrow as a dishonest man.

Mr. Raison: I shall concede to the hon. Gentleman one thing—and that is that I believe that no Member of Parliament should be bound to take instructions from a local authority. That is part of our constitution. However, there was far from one Press report covering this


matter. I have read a number today conveying the strong feelings of the North-East Derbyshire District Council and stating categorically—if I am wrong I shall accept correction—that the Labour Group leader was the person who called upon the hon. Gentleman to behave in this way, and as I say—

Mr. Swain: He went to a tea-party in Manchester.

Mr. Raison: We had plenty of other evidence before the Committee and before the House about the deep distaste felt in North-East Derbyshire for the action which the Government are putting forward.
I believe that what the Government are putting forward is both profoundly mistaken and completely unnecessary. There is no need to have the possibility written into the Bill that the money should be collected from the tenants or the ratepayers outside the areas to which the rent loss certificate applies. There is no need for this and there is no advantage in it. If this provision is enacted it can only produce bitterness. When the Government say again and again that they are trying to end bitterness, how can they be so foolish as to persist with the ingredients in the Bill which, if they are implemented, are the surest guarantee I know that they will prolong bitterness.

7.0 p.m.

Mr. Stephen Ross: I wish to speak to Amendments Nos. 9, 10, 18 and 19, in my name, which have much the same effect as Amendment No. 5, moved by the hon. Member for Aylesbury (Mr. Raison).
My amendments put the responsibility for meeting the costs involved firmly on the backs of those who benefit by the actions of the councils concerned. It is right that that should be so. I support everything that the hon. Gentleman has said.
I was disappointed to hear that the Press reports from North-East Derbyshire were not correct. I accept what the hon. Member for Derbyshire, North-East (Mr. Swain) said. I had been heartened by the fact that it appeared that the council there was concerned to make it clear that it felt that the deficit, such as it is, should fall on those in its area—in Clay Cross

in particular—who have benefited through rates or rents. If that is not correct, the amendments are much more important, because we should make it clear in the House exactly what we feel should happen which is that the payment of the deficit should fall on those who benefited.
I am surprised that the Press reports are not correct, because we have had many representations from people resident in the area and other areas. There happens to be a Liberal Party in Clay Cross—

Mr. Skinner: There is not.

Mr. Ross: In that case, the gentleman who has been in touch with me must be telling me an untruth. I have had representations from a Clay Cross Liberal Party, and I am delighted that there is such a party. My hon. Friend the Member for Rochdale (Mr. Smith) spoke there during the last election—[Interruption.]It is progress. [Interruption.] I suggest that the sedentary remarks should cease. The letters I have received from residents in the area—

Mr. Skinner: Name some.

Mr. Ross: I shall pass the letters to the hon. Gentleman after the debate, and he can read them.
These residents say that they would be outraged if they had to pay for back rents and rates for which they have no responsibility. Therefore, I recommend support for the amendments. I also support the view that the payments could and should be clawed back within 18 months to two and a half years.

Mr. Swain: Is the hon. Gentleman aware that the biggest contribution to rate increases by any authority this year was caused by the Act reorganising local government, an Act passed by the Tory Government in 1972?

Mr. Ross: I am well aware of that, because I represent a constituency which has suffered very much from the reorganisation—a reorganisation for which we never asked. We now have three councils when we should have one. But that is not the point now.
The figures supplied to us in Committee made it clear that there would not be a great burden on the ratepayers if the


money were repaid in 18 months to three years. Therefore, I support the suggestion that it should be repaid over 18 months or two and a half years. The figures quoted are not unreasonable. I ask the House to support the Opposition amendments and those in my name.

The Parliamentary Secretary to the Law Officers' Department (Mr. Arthur Davidson): Perhaps I may reply to the amendments in the order in which the hon. Member for Aylesbury (Mr. Raison) moved them. The amendments moved by the hon. Member for Isle of Wight (Mr. Ross) were closely linked—

Mr. Speaker: Order. Only one amendment has been moved Amendment No 5. The others are being discussed with it. Whether I shall allow them to be moved afterwards is a matter for me.

Mr. Davidson: I apologise, Mr. Speaker. I shall discuss the other amendments in the order in which they were discussed previously.

Amendments Nos. 5, 7 and 11 would greatly shorten the time available to councils to recover the amount of a rent loss certificate. As the hon. Member for Aylesbury made clear, they would require a council to recover the necessary amount, normally before 1st April 1977, although the Secretary of State would have power to extend the period to 1st April 1978, subject to affirmative resolution of both Houses of Parliament.

I fully appreciate that in most cases the necessary increases in rates or rents for the recovery of the certified rent loss will be very small. The hon. Gentleman referred to the table supplied in Committee by my hon. Friend the Under-Secretary of State for the Environment, which makes that clear. The hon. Gentleman was right to draw that conclusion from it, but under the Bill the authorities concerned have absolute discretion to recover as soon as they wish. They do not have to recover over the five-year period, but can recover in a much shorter period. The Government's discussions with the local authority associations left the clear impression that most of the authorities likely to be affected want the whole thing put behind them as speedily as possible.

Mr. Raison: In that case, why give the power to spread the payment over five years?

Mr. Davidson: I shall come to that.
Our conclusion is as follows. First there is no need to impose a rigid timetable on the local authorities. Secondly, the amendments would go against the principle that this Government have always followed of allowing a discretion to responsible councils.
It would be impracticable to operate the time limits provided in the amendments. Nobody can foresee all the circumstances of a particular case. There might well be appeals stretching well into 1976. The court procedure preferred by the Opposition would be likely greatly to lengthen the period. The Opposition amendments ignore the wishes and practicalities of local government in exactly the same way—and I do not wish to be contentious—as the Opposition ignored them in the Housing Finance Act. There is no obligation on councils to extend the period to five years. They are responsible bodies, and they will, no doubt, note what the hon. Gentleman said. They have to face their electorates. The vast majority of them will no doubt, try to collect the money within as short a period as possible.

Amendment No. 11 seeks to remove the discretion of the Secretary of State to extend the recovery period on application by a council. We see no justification for circumscribing this power. It is nonsensical to think that a Secretary of State—certainly the present Secretary of State—might abuse his discretion. It would be in no one's interests to do so. It makes sense to provide a useful fallback discretion of the kind provided in the Bill in case in any particular area the burden of recovery should prove to be heavier than it is desirable to impose on the tenants in these difficult times.

In those circumstances, whilst I appreciate the sincerity of the hon. Gentleman's case, I must ask the House to resist the amendments.

Amendment No. 8 is designed to restrict the recovery through rent increases of the amount in a rent loss certificate to the area to which the certificate relates. The choice now provided in the subsection which the amendment seeks to delete


would apply where local government reorganisation had incorporated a former defaulting council as part of a larger successor council's area. The obvious case is that of the Clay Cross Urban District.

I appreciate the strength of the argument put forward by the Opposition here and in Committee in support of this amendment. They are fully entitled to their views. It is a respectable point. However, those arguments illustrate once again the area of difference between the two sides of the House. We believe that local authorities should be allowed to decide for themselves how they carry out the duties and functions placed upon them. We do not regard them as either agents or tools of the Government. The approach that this Government have given to local authorities is to regard them as bodies responsible to their own electorate and, therefore, best able to take the right decisions for their areas.

Mr. Keith Speed: I am interested to hear of that independence of local authorities. Will the hon. Gentleman pass this on to the Secretary of State for Education and Science, who is trying to blackmail those counties which will not fit in with his plans to go comprehensive?

Mr. Davidson: If I entered into argument on that matter I should be quickly ruled out of order.
Perhaps I should point out why we have returned to local authorities the responsibility for fixing rents for their dwellings instead of giving that responsibility, as previously to non-accountable bodies. The hon. Gentleman said that he was glad that there was provision in the Bill making it clear that any losses dealt with by the Bill should be made good by the local community. We propose, therefore, following on from that, that the recovery should be the duty of the local authority responsible for the area to which the rent loss certificate relates. That being so, we consider it better to leave the decision as to the actual area from which the certified sums shall be recovered by increased rents to the council concerned.
Our proposals allow the council complete freedom to restrict the area of recovery to that of the former council concerned, if it wishes. If not, recovery

can be spread over the whole of the area. The local councillors have to face an election in the area from which they are recovering rents. I refer to the area of the previous council and to the area where there was no rent loss certificate. Doubtless, being sensible bodies, they will bear that strictly in mind.

Mr. Raison: Will the hon. Gentleman say how the areas to which the rent loss certificate does not apply can possibly be described as the communities which benefited from late implementation? That was the criterion put forward by the Secretary of State. How can it apply to those people where the rent loss certificate does not apply?

Mr. Davidson: That will be a matter for the local authorities. Clearly, the local authorities will seek to recover the sums, in most cases, from the local community most intimately affected.
The hon. Member for the Isle of Wight will not expect me to deal with his amendments in detail since they cover the same ground as those moved by the hon. Member for Aylesbury.
The third group of amendments deals with the recovery of the amount in a rent loss certificate to the area to which a certificate relates, where any part of that amount is to be charged to the general rate fund. I do not think that I need deal with those amendments in detail. The same points arise. Once again, it is left to the discretion of the local authorities. They are sensible people. They must face the electorate. The Bill does not force them to collect from an area other than the area which originally was most intimately affected. No doubt they will bear in mind everything said by the hon. Gentleman. We feel that the council should have complete freedom to recover sums from the area for which it is responsible. We do not see any necessity to restrict that freedom.
In all the circumstances, whilst I fully appreciate the sincerity and the feeling which inspired these amendments, I must ask the House to resist them.

7.15 p.m.

Mr. Cecil Parkinson: We have listened with great interest to what was said by the Parliamentary Secretary. We well understand why he gave fumbling, slightly inept


replies on this group of amendments. We well understand his embarrassment at having to read that kind of brief.
In explaining the Government's approach to this problem, the hon. Gentleman said that the Government took the view that local authorities should have complete freedom of action and should not in any way be influenced or interfered with by the Government. However, that does not match up to the remarks of the Secretary of State last week, when he said in Manchester that the party was over and that the Government would have to insist that local authorities adjust their rents. In addition, in his Budget speech the Chancellor said that a committee of representatives from local authorities and the Government should be set up to discuss the question of local authority expenditure, which is another way of saying that the Government are not happy to leave this matter to the local authorities nor to leave control of local authority programmes entirely in local authority hands. Incidentally, the Secretary of State said that the party was over at one of the most expensive end-of-party parties ever mounted.
The Parliamentary Secretary pretended that as the Government were concerned not to interfere with local authorities he was not prepared to accept our amendment. I think that was a poor argument which he put over in an uncharacteristically poor way.
With this group of amendments the Opposition made the mistake of taking the Attorney-General at his face value and believing what he said. In his speech today he said that the feeling behind the legislation was that those who had benefited should now pay. He also spoke about wanting to wipe the slate clean as quickly as possible. In this group of amendments we say that a five-year collection period is far too long. The Attorney-General seems to agree with that as he wants to wipe the slate clean quickly. We say that five years is not quickly. It is too long a period. The period should be shortened. We say that April 1977 is long enough.
In Committee the Under-Secretary said that at the time the legislation was drafted his Department had no idea of the sums involved. He referred to the famous list

of 18 councils concerned and said that in 14 of the cases the whole arrears could be cleared off by a one-off 2p rate. The Under-Secretary, in his characteristically frank way, said that he had not seen those figures before. He was surprised by them. We say that when the Government drafted the legislation and chose the five-year period they were not aware, by their own admission, of the small sums involved. Now that the Government know what the sums are, the period of five years is obviously far too long. We agree that the slate should be wiped clean, but let us not take five years to do it when the sums involved are obviously small.
The second group of amendments embodies what the Attorney-General said about letting those who have benefited now pay. If the Government believe that, they should accept the restriction that is proposed. The Government seem to think that most of the councils involved will do what we want to make them do. We suggest that the councils should not be left with that option. We should embody in the legislation the spirit enunciated by the Attorney-General, that those who have had the benefit should pay.
On this occasion I prefer the instinct of the Attorney-General. We want to see the slate wiped clean, and wiped clean quickly, and we want the people who had the benefit to pay. Acceptance of this group of amendments would deliver what the Attorney-General said he wanted. Frankly, I think that the Under-Secretary gave a most unsatisfactory answer to the debate.

Mr. Lawrence: Once again a thoroughly embarrassed and ashamed Minister came to the Dispatch Box and, in a flat, dull tone, tried to obscure the essential evil of the Bill and this clause in particular. The clause, unamended, is absurd and patently unjust. It shows what follows from the despicable lack of principle which is shown in the Bill.
Hon. Gentlemen opposite speak of justice as though they have the sole right to claim justice on behalf of the Labour Party throughout this land. What justice is it to people who have not benefited in any shape or form from the advantages of not paying their rents to fork out the excesses which have been made as a result of the Bill? There is


not the beginning of a gesture of justice to people who came from areas outside that covered by Clay Cross.
What justice is there in extending the period of payment to five years? Hon. Gentlemen opposite say that it is a matter of discretion for the local authorities, but they must be allowing that period of time for those local authorities which wish to punish people who do not subscribe to the Labour creed, because we all know that irresponsible councils—Clay Cross is one—will happily indulge in a five-year extension rather than pay the money over a shorter period.
The evil that follows should be clear to everybody. If a council is in default to the extent of £120,000 as of last year, after five years that money, at 12 per cent. to 15 per cent. rates of interest, will be considerably reduced in value because of the borrowing that it will have to make over the five years to make up that value. With interest at about 15 per cent. the additional money which will have to be borrowed by any council to make up a deficit of £120,000 five years earlier will amount to £75,000. That means that that council will have lost the equivalent of just under £200,000. That is one of the evils that follows having an extended period of five years for repayment.
But there is more. We all know that we are not inflating now at 1 per cent. or 2 per cent. a year. We are inflating at 20 per cent. a year That means that after five years at 20 per cent.—and Heaven help us if it continues, but it might be higher than 20 per cent. in the next year or so—the value of that £120,000 will be nearer £240,000. Therefore, we are talking about a change in the value of money over five years nearer to £300,000 or £400,000 than the £120,000 which is the default at a given date.

Mr. Swain: I should like to give the hon. Gentleman au example of a Conservative-controlled council, now absorbed by North-East Derbyshire, which, 12 months before the take-over, had a balance of £100,000. The council spent that £100,000 on a prestige civic centre which, within six months, fell down and is now costing the ratepayers of North-East Derbyshire £40,000 to repair, plus the interest on the borrowed money.

Mr. Lawrence: No doubt the hon. Gentleman is intending to signify dis-

approval of the misuse of money in that way. I do not know to which council he is referring, but I do not wish to go into the merits of that argument, even if I knew them. The hon. Gentleman is expressing disapproval. How much more disapproval ought he to be expressing about this clause? Even the dimwitted—of course, I do not suggest that he is in any sense dimwitted—realise that £120,003 value in 1974—

Mr. Swain: Rubbish.

Mr. Lawrence: —will be nearer £400,000 value in 1979.

Mr. Swain: Rubbish. Ask Roger Foster.

Mr. Lawrence: There is talk about injustice. But who will make up the difference? The ratepayers, if not the taxpayers, will be asked to make up that difference. We are assured that the taxpayers will not be asked to make up that difference, so it must be the ratepayers of the area covered by Clay Cross. [Interuption.] I appreciate that the hon. Member for Derbyshire, North-East (Mr. Swain) does not like the line of argument that I am pursuing. That is why he continues to heckle and try to interrupt, but he ought, perhaps, to pay attention. He is intensely disturbed at the injustice of the example which he gave. Therefore, he ought to be intensely disturbed at the injustice of the example that I am giving. In the end the ratepayers will have to pay the difference between £120,000 and £400,000, will they not?
It is not just a question of the ratepayers paying. It may be that the local authority was planning to set aside some money for a health clinic or some of the social needs of that very part of the country that the hon. Member for Derbyshire, North-East represents and claims is underprivileged. If that kind of money has to be spent on this kind of procedure, the authority will have that much less to spend on social needs. So the injustice will be visited not only upon the hon. Gentleman's constituents, but on the constituents of all hon. Members who represent areas where this ridiculous measure is enforced.
It is unjust that this measure should be extended beyond the bounds of those who have benefited from the failure to pay the increased rents, and it is unjust to


people who will otherwise be expected in the course of five years to pay out more money or to suffer losses as a result of it. That is why we have put down amendments which would have the effect of shortening the period in a way which, as my hon. Friend the Member for Aylesbury (Mr. Raison) pointed out, would cause nobody any harm, except possibly the Clay Cross councillors who are the prime beneficiaries of this measure and to whom it is totally, utterly and completely directed.

7.30 p.m.

Mr. Percival: My hon. Friends have demonstrated that the Government's case is hopeless, as devoid of merit as it is of logic. Let me remind the Minister of some of the points they have made in the hope that even yet the Government may see the light of day.
The period allowed, we say, is too long. It is five years, starting at the earliest on 1st April 1976 and in some cases not until 1st April 1977. It is said that, without a measure like this, there will be burning resentment in the breasts of many who feel that they are being hard done by. But the very passing of the Bill will cause resentment to many others who will have to pay up for faults which were not theirs.—[Interruption.] Does it never occur to the hon. Member for Derbyshire, North-East (Mr. Swain), who keeps grunting away, or to the Minister, that that is inevitable? The Bill will cause bitter resentment to rent and ratepayers who will have to pay more because someone for whom they did not vote defied the law.

Mr. Swain: If I was treated with contempt by the Tories in North-East Derbyshire and I did not disturb them, I would not consider that I was doing my job on behalf of the people who elected me—a majority of 10,500.

Mr. Percival: That may be so. I have no doubt that the hon. Gentleman will do his duty as he sees fit. But I hope that he will concede that there may be two sides to the argument. I accept that the Bill will put some bitterness to rest, but he would do well to accept that it will also cause bitter resentment and great unfairness. If the hon. Gentleman cannot see that, he is not prepared to look at the

other side of the penny. What is the point of spreading the resulting unfairness and resentment over five, six or seven years? The Minister's speech showed that there is none.
I accept what the Minister said, that the aim can be achieved more quickly under the Bill. I do not know whether he also meant to say that it can be done more quickly as a matter of fact, but that is obvious too. Now that we have a list of the amounts in question, it is apparent that if anyone spreads the collection over five years the amounts collected on the rent or rates each year will be peanuts. It is clear that it will be no hardship to anyone to collect in the period specified in the amendment. This is certainly so in the light of the provision in another amendment that the Secretary of State can extend the period for another year, to 1st April 1978, in special circumstances.
Anyone prepared to face facts must admit that three years from now must be sufficient time to collect these amounts, which would still be very small if spread over two years. The Minister says that it can be done more quickly, both because the law allows—if he did not concede that it can be done more quickly because of the amounts involved, I think he should—and because the Government want to do so. Let us accept all that. Why then give this long extra period?
The Minister says that our proposal is against the principle of allowing discretion to responsible councils. In fact, what we propose would involve neither insult, detriment nor difficulty to any responsible council. But the Government's lengthy period would allow too much latitude to irresponsible councils. That follows from their own argument and shows how threadbare it is.
I observed no answer from the Minister to our proposal that rent increases should be limited to the area where the deficit arose, except that local authorities should be allowed to exercise powers in their own way. Will he not recognise even at this late stage that his own colleagues, including the Attorney-General, have said that that is not enough, that those who benefited must bear the burden? Having enunciated that principle so often, they should give effect to it. Clause 2 as it stands allows councils to ensure that the


burden falls on people who did not benefit and provides that it may fall on many more people.
These arguments will not do. The paucity of the Minister's reply is further convincing evidence of the merits of the case made by my hon. Friends, all of

whom I now invite to vote for the Amendment.

Question put, That the amendment be made:—

The House divided: Ayes 226, Noes 237.

Division No. 204]
AYES
[7.38 p.m.


Adley, Robert
Gorst, John
Miller, Hal (Bromsgrove)


Aitken, Jonathan
Gow, Ian (Eastbourne)
Miscampbell, Norman


Alison, Michael
Gower, Sir Raymond (Barry)
Moate, Roger


Amery, Rt. Hon. Julian
Grant, Anthony (Harrow C.)
Monro, Hector


Arnold, Tom
Gray, Hamish
Montgomery, Fergus


Atkins, Rt. Hon. H. (Spelthorne)
Griffiths, Eldon
More, Jasper (Ludlow)


Awdry, Daniel
Grimond, Rt. Hon. J.
Morgan, Geraint


Banks, Robert
Grist, Ian
Morgan-Giles, Rear-Admiral


Beith, A. J.
Grylls, Michael
Morris, Michael (Northampton S.)


Bell, Ronald
Hall, Sir John
Morrison, Charles (Devizes)


Bennett, Sir Frederic (Torbay)
Hall-Davis, A. G. F.
Morrison, Hon. Peter (Chester)


Berry, Hon. Anthony
Hamilton, Michael (Salisbury)
Mudd, David


Biffen, John
Hampson, Dr. Keith
Neave, Airey


Biggs-Davison, John
Hannam, John
Nelson, Anthony


Body, Richard
Harrison, Col. Sir Harwood (Eye)
Neubert, Michael


Boscawen, Hon. Robert
Hastings, Stephen
Newton, Tony


Bowden, A. (Brighton, Kemptown)
Havers, Sir Michael
Nott, John


Boyson, Dr. Rhodes (Brent)
Hayhoe, Barney
Oppenheim, Mrs. Sally


Braine, Sir Bernard
Heseltine, Michael
Page, Rt. Hon. R. Graham (Crosby)


Brittan, Leon
Hicks, Robert
Pardoe, John


Brotherton, Michael
Higgins, Terence L.
Parkinson, Cecil


Bryan, Sir Paul
Holland, Philip
Pattie, Geoffrey


Buck, Antony
Howe, Rt. Hon. Sir Geoffrey
Penhaligon, David


Budgen, Nick
Howell, David (Guildford)
Percival, Ian


Bulmer, Esmond
Howells, Geraint (Cardigan)
Peyton, RI Hon. John


Burden, F. A.
Hunt, John
Pink, R. Bonner


Carlisle, Mark
Hurd, Douglas
Prior, Rt. Hon. James


Carr, Rt. Hon. Robert
Hutchison, Michael Clark
Raison, Timothy


Chalker, Mrs. Lynda
Irvine, Bryant Godman (Rye)
Rathbone, Tim


Channon, Paul
Irving, Charles (Cheltenham)
Rees, Peter (Dover &amp; Deal)


Churchill, W. S.
James, David
Rees-Davies, W. R.


Clark, Alan (Plymouth, Sutton)
Jenkin, Rt. Hon. P. (Wanst'd &amp; W'df'd)
Renton, Rt. Hon. Sir D. (Hunts)


Clarke, Kenneth (Rushcliffe)
Jessel Toby
Ridley, Hon. Nicholas


Clegg, Walter
Johnson Smith, G. (E Grinstead)
Ridsdale Julian


Cockcroft, John
Jones, Arthur (Daventry)
Rifkind, Malcolm


Cooke, Robert (Bristol W.)
Jopling, Michael
Roberts, Wyn (Conway)


Cope, John
Joseph, Rt. Hon. Sir Keith
Ross, Stephen (Isle of Wight)


Cordle, John H.
Kaberry, Sir Donald
Rossi, Hugh (Hornsey)


Cormack, Patrick
Kellett-Bowman, Mrs. Elaine
Royle, Sir Anthony


Costain, A. P.
Kershaw, Anthony
Sainsbury, Tim


Critchley, Julian
Kilfedder, James
St. John-Stevas, Norman


Crouch, David
King, Evelyn (South Dorset)
Scott, Nicholas


Crowder, F. P.
King, Tom (Bridgwater)
Shaw, Giles (Pudsey)


Dodsworth, Geoffrey
Kitson, Sir Timothy
Shelton, William (Streatham)


Douglas-Hamilton, Lord James
Knight, Mrs. Jill
Shepherd, Colin


du Cann, Rt. Hon. Edward
Knox, David
Shersby, Michael


Durant, Tony
Lane, David
Silvester, Fred


Eden, Rt. Hon. Sir John
Langford-Holt, Sir John
Sims, Roger


Edwards, Nicholas (Pembroke)
Latham, Michael (Melton)
Sinclair, Sir George


Elliott, Sir William
Lawrence, Ivan
Skeet, T. H. H.


Emery, Peter
Lawson, Nigel
Smith, Cyril (Rochdale)


Eyre, Reginald
Le Merchant, Spencer
Speed, Keith


Fairbairn, Nicholas
Lester, Jim (Beeston)
Spence, John


Fairgrieve, Russell
Lewis, Kenneth (Rutland)
Spicer, Michael (S Worcester)


Fell, Anthony
Lloyd, Ian
Sproat, Iain


Finsberg, Geolfrey
Loveridge, John
Stanbrook, Ivor


Fletcher, Alex (Edinburgh N.)
Luce, Richard
Stanley, John


Fookes, Miss Janet
McAdden, Sir Stephen
Steen, Anthony (Wavertree)


Fox, Marcus
McCrindle, Robert
Stewart, Ian (Hitchin)


Fraser, Rt. Hon. H. (Stafford &amp; St)
Macfarlane, Neil
Stokes, John


Freud, Clement
MacGregor, John
Tapsell, Peter


Fry, Peter
Macmillan, Rt. Hon. M. (Farnham)
Taylor, R. (Croydon NW)


Galbraith, Hon. T. G. D.
McNair-Wilson, M. (Newbury)
Taylor, Teddy (Cathcart)


Gardner, Edward (S Fylde)
McNair-Wilson, P. (New Forest)
Tebbit, Norman


Gilmour, Rt. Hon. Ian (Chesham)
Madel, David
Temple-Morris, Peter


Gilmour, Sir John (East Fife)
Marshall, Michael (Arundel)
Thatcher, Rt. Hon. Margaret


Glyn, Dr. Alan
Mates, Michael
Thomas, Rt. Hon. P. (Hendon S.)


Godber, Rt. Hon. Joseph
Mather, Carol
Townsend, Cyril D.


Goodhart, Philip
Maude, Angus
Trotter, Neville


Goodhew, Victor
Maxwell-Hyslop, Robin
Tugendhat, Christopher


Goodlad, Alastair
Mayhew, Patrick
van Straubenzee, W. R.




Vaughan, Dr. Gerard
Walters, Dennis
Young, Sir G. (Ealing, Acton)


Viggers, Peter
Weatherill, Bernard



Wainwright, Richard (Colne V.)
Wells, John
TELLERS FOR THE AYES:


Wakeham, John
Whitelaw, Rt. Hon. William
Mr. Adam Butler and


Walker, Rt. Hon. P. (Worcester)
Wiggin, Jerry
Mr. W. Benson.


Wall, Patrick
Winterton, Nicholas





NOES


Armstrong, Ernest
Fraser, John (Lambeth, N'w'd)
Moyle, Roland


Ashley, Jack
Garrett, John (Norwich S.)
Murray, Rt. Hon. Ronald King


Atkins, Ronald (Preston N.)
Garrett, W. E. (Wallsend)
Noble, Mike


Bagier, Gordon A. T.
George, Bruce
Oakes, Gordon


Barnett, Guy (Greenwich)
Ginsburg, David
O'Halloran, Michael


Barnett, Rt. Hon. Joel (Heywood)
Golding, John
O'Malley, Rt. Hon. Brian


Bates, All
Gould, Bryan
Orbach, Maurice


Bean, R. E.
Gourlay, Harry
Ovenden, John


Bennett, Andrew (Stockport N.)
Graham, Ted
Owen, Dr. David


Blenkinsop, Arthur
Grant, John (Islington C.)
Palmer, Arthur


Boardman, H.
Grocott, Bruce
Park, George


Booth, Albert
Hamilton, W. W. (Central Fife)
Parker, John


Bottomley, Rt. Hon. Arthur
Hardy, Peter
Parry, Robert


Bray, Dr. Jeremy
Harper, Joseph
Peart, Rt. Hon. Fred


Brown, Hugh D. (Provan)
Harrison, Walter (Wakefield)
Pendry, Tom


Brown, Robert C. (Newcastle W.)
Hart, Rt. Hon. Judith
Phipps, Dr. Colin


Buchanan, Richard
Hattersley, Rt. Hon. Roy
Prentice, Rt. Hon. Reg


Butler, Mrs. Joyce (Wood Green)
Hatton, Frank
Prescott, John


Callaghan, Rt. Hon. J. (Cardiff SE)
Healey, Rt. Hon. Denis
Price, C. (Lewisham W.)


Callaghan, Jim (Middleton &amp; P.)
Heffer, Eric S.
Price, William (Rugby)


Campbell, Ian
Hooley, Frank
Radice, Giles


Canavan, Dennis
Horam, John
Rees, Rt. Hon. Merlyn (Leeds S.)


Cant, R. B.
Howell, Denis (B ham, Sm H.)
Richardson, Miss Jo


Carter, Ray
Hughes, Rt. Hon. C. (Anglesey)
Roberts, Albert (Normanton)


Carter-Jones, Lewis
Hughes, Mark (Durham)
Roberts, Gwilym (Cannock)


Cartwright, John
Hughes, Robert (Aberdeen N.)
Robertson, John (Paisley)


Castle, Rt. Hon. Barbara
Hughes, Roy (Newport)
Roderick, Caerwyn


Clemitson, Ivor
Hunter, Adam
Rodgers, George (Chorley)


Cocks, Michael (Bristol S.)
Jackson, Colin (Brighouse)
Rodgers, William (Stockton)


Coleman, Donald
Jackson, Miss Margaret (Lincoln)
Rooker, J. W.


Concannon, J. D.
Janner, Greville
Roper, John


Conlan, Bernard
Jeger, Mrs. Lena
Rose, Paul B.


Cook, Robin F. (Edin C.)
Jenkins, Hugh (Putney)
Ross, Rt. Hon. W. (Kilmarnock)


Corbett, Robin
John, Brynmor
Sandelson, Neville


Cox, Thomas (Tooting)
Jones, Alec (Rhondda)
Sedgemore, Brian


Craigen, J. M. (Maryhill)
Jones, Barry (East Flint)
Selby, Harry


Crosland, Rt. Hon. Anthony
Kaufman, Gerald
Shaw, Arnold (Ilford South)


Cryer, Bob
Kerr, Russell
Sheldon, Robert (Ashton-u-Lyne)


Cunningham, G. (Islington S.)
Kilroy-Silk, Robert
Shore, Rt. Hon. Peter


Cunningham, Dr. J. (Whiteh)
Lambie, David
Silkin, Rt. Hon. John (Deptford)


Davidson, Arthur
Lamborn, Harry
Silkin, Rt. Hon. S. C. (Dulwich)


Davies, Bryan (Enfield N.)
Lamond, James
Sillars, James


Davies, Denzil (Llanelli)
Lead bitter, Ted
Skinner, Dennis


Davis, Clinton (Hackney C.)
Lee, John
Small, William


Deakins, Eric
Lever, Rt. Hon. Harold
Smith, John (N Lanarkshire)


Dean, Joseph (Leeds West)
Lomas, Kenneth
Snape, Peter


de Freitas, Rt. Hon. Sir Geoffrey
Lyon, Alexander (York)
Spearing, Nigel


Delargy, Hugh
Lyons, Edward (Bradford W.)
Stallard, A. W.


Dell, Rt. Hon. Edmund
Mabon, Dr. J. Dickson
Stewart, Rt. Hon. M. (Fulham)


Doig, Peter
McElhone, Frank
Stott, Roger


Dormand, J. D.
MacFarquhar, Roderick
Strang, Gavin


Douglas-Mann, Bruce
Mackenzie, Gregor
Strauss, Pt Hon. G. R.


Duffy, A. E. P.
Maclennan, Robert
Summerskill, Hon. Dr. Shirley


Dunn, James A.
McMillan, Tom (Glasgow C.)
Swain, Thomas


Dunnett, Jack
McNamara, Kevin
Taylor, Mrs. Ann (Bolton W.)


Dunwoody, Mrs. Gwyneth
Madden, Max
Thomas, Jeffrey (Abertillery)


Eadie, Alex
Mahon, Simon
Thomas, Mike (Newcastle E.)


Edelman, Maurice
Mailalieu, J. P. W.
Thomas, Ron (Bristol NW)


Edge, Geoff
Marks, Kenneth
Thorne, Stan (Preston South)


Edwards, Robert (Wolv SE)
Marquand, David
Tierney, Sydney


Ellis, John (Brigg &amp; Scun)
Marshall, Dr. Edmund (Goole)
Tinn, James


English, Michael
Marshall, Jim (Leicester S.)
Tomlinson, John


Ennals, David
Mason, Rt. Hon. Roy
Tomney, Frank


Evans, Ioan (Aberdare)
Maynard, Miss Joan
Urwin, T. W.


Evans, John (Newton)
Meacher, Michael
Wainwright, Edwin (Dearne V.)


Ewing, Harry (Stirling)
Mellish, Rt. Hon. Robert
Walker, Harold (Doncaster)


Faulds, Andrew
Mendelson, John
Walker, Terry (Kingswood)


Fitt, Gerard (Belfast W.)
Millan, Bruce
Ward, Michael


Flannery, Martin
Miller, Mrs. Millie (Ilford N.)
Watkins, David


Fletcher, Raymond (Ilkeston)
Mitchell, R. C. (Soton, Itchen)
Watkinson, John


Fletcher, Ted (Darlington)
Molloy, William
Weetch, Ken


Foot, Rt. Hon. Michael
Moonman, Eric
Weitzman, David


Ford, Ben
Morris, Alfred (Wythenshawe)
Wellbeloved, James


Forrester, John
Morris, Charles R. (Openshaw)
White, Frank R. (Bury)


Fowler, Gerald (The Wrekin)
Morris, Rt. Hon. J. (Aberavon)
White, James (Pollok)







Whitehead, Phillip
Wilson, William (Coventry SE)
Young, David (Bolton E.)


Whitlock, William
Wise, Mrs. Audrey



Willey, Rt. Hon. Frederick
Woodall, Alec
TELLERS FOR THE NOES:


Williams, Alan (Swansea W.)
Woof, Robert
Mr. James Hamilton and


Williams, Alan Lee (Hornch'ch)
Wrigglesworth, Ian
Mr. David Stoddart


Wilson, Alexander (Hamilton)

Question accordingly negatived.

Amendment made: No. 6, in page 2, line 32, after 'or', insert:
'. where more than one council held such dwellings on that date,'.—[Mr. Kaufman.]

Amendment proposed: No. 8, in page 2, line 39, leave out subsection (3) and insert:
'() A council shall perform their duty under this section by a general increase of the

rents of those of their housing revenue account dwellings in the part or parts of their area to which the certificate relates; and a council may make any such increase notwithstanding section 111 of the Housing Act 1957 (charges for local authority's houses)'.—[Mr. Percival.]

Question put. That the amendment be made:—

The House divided: Ayes 227, Noes 237.

Division No. 205.]
AYES
[7.52 p.m.


Adley, Robert
Fookes, Miss Janet
Knight, Ms Jill


Aitken, Jonathan
Fox, Marcus
Knox, David


Alison, Michael
Fraser, Rt. Hon. H. (Stafford &amp; St)
Lane, David


Amery, Rt. Hon. Julian
Freud, Clement
Langford-Holt, Sir John


Arnold, Tom
Fry, Peter
Latham, Michael (Melton)


Atkins, Rt. Hon. H. (Spelthorne)
Galbraith, Hon. T. G. D.
Lawrence, Ivan


Awdry, Daniel
Gardner, Edward (S Fylde)
Lawson, Nigel


Banks, Robert
Gilmour, Rt. Hon. Ian (Chesham)
Lester, Jim (Beeston)


Beith, A. J.
Gilmour, Sir John (East Fife)
Lewis, Kenneth (Rutland)


Bell, Ronald
Glyn, Dr. Alan
Lloyd, Ian


Bennett, Sir Frederic (Torbay)
Godber, Rt. Hon. Joseph
Loveridge, John


Benyon, W.
Goodhart, Philip
Luce, Richard


Berry, Hon. Anthony
Goodhew, Victor
McAdden, Sir Stephen


Biffen, John
Goodlad, Alastair
McCrindle, Robert


Biggs-Davison, John
Gorst, John
Macfarlane, Neil


Body, Richard
Gow, Ian (Eastbourne)
MacGregor, John


Boscawen, Hon. Robert
Gower, Sir Raymond (Barry)
Macmillan, Rt. Hon. M. (Farnham)


Bowden, A. (Brighton, Kemptown)
Grant, Anthony (Harrow C.)
McNair-Wilson, M. (Newbury)


Boyson, Dr. Rhodes (Brent)
Gray, Hamish
McNair-Wilson, P. (New Forest)


Braine, Sir Bernard
Griffiths, Eldon
Madel, David


Brittan, Leon
Grimond, Rt. Hon. J.
Marshall, Michael (Arundel)


Brotherton, Michael
Grist, Ian
Mates, Michael


Bryan, Sir Paul
Grylls, Michael
Mather, Carol


Buck, Antony
Hall, Sir John
Maude, Angus


Budgen, Nick
Hall-Davis, A. G. F.
Maxwell-Hyslop, Robin


Bulmer, Esmond
Hamilton, Michael (Salisbury)
Mayhew, Patrick


Burden, F. A.
Hampson, Dr. Keith
Miller, Hal (Bromsgrove)


Carlisle, Mark
Hannam, John
Miscampbell, Norman


Carr, Rt. Hon. Robert
Harrison, Col. Sir Harwood (Eye)
Moate, Roger


Chalker, Mrs. Lynda
Hastings, Stephen
Monro, Hector


Channon, Paul
Havers, Sir Michael
Montgomery, Fergus


Churchill, W. S.
Hayhoe, Barney
More, Jasper (Ludlow)


Clark, Alan (Plymouth, Sutton)
Heseltine, Michael
Morgan, Geraint


Clarke, Kenneth (Rushcliffe)
Hicks, Robert
Morgan-Giles, Rear-Admiral


Clegg, Walter
Higgins, Terence L.
Morris, Michael (Northampton S.)


Cockcroft, John
Holland, Philip
Morrison, Charles (Devizes)


Cooke, Robert (Bristol W.)
Howe, Rt. Hon. Sir Geoffrey
Morrison, Hon. Peter (Chester)


Cope, John
Howell, David (Guildford)
Mudd, David


Cordle, John H.
Howells, Geraint (Cardigan)
Neave, Airey


Cormack, Patrick
Hunt, John
Nelson, Anthony


Costain, A. P.
Hurd, Douglas
Neubert, Michael


Critchley, Julian
Hutchison, Michael Clark
Newton, Tony


Crouch, David
Irvine, Bryant Godman (Rye)
Nott, John


Crowder, F. P.
Irving, Charles (Cheltenham)
Oppenheim, Mrs. Sally


Dodsworth, Geoffrey
James, David
Page, Rt. Hon. R. Graham (Crosby)


Douglas-Hamilton, Lord James
Jenkin, Rt. Hon. P. (Wanst'd &amp; W'df'd)
Pardoe, John


du Cann. Rt. Hon. Edward
Jessel, Toby
Parkinson, Cecil


Durant, Tony
Johnson Smith, G. (E Grinstead)
Pattie, Geoffrey


Eden, Rt. Hon. Sir John
Jones, Arthur (Daventry)
Penhaligon, David


Edwards, Nicholas (Pembroke)
Jopling, Michael
Percival, Ian


Elliott, Sir William
Joseph, Rt. Hon. Sir Keith
Peyton, Rt. Hon. John


Emery, Peter
Kaberry, Sir Donald
Pink, R. Bonner


Eyre, Reginald
Kellett-Bowman, Mrs. Elaine
Prior, Rt. Hon. James


Fairbairn, Nicholas
Kershaw, Anthony
Raison, Timothy


Fairgrieve, Russell
Kilfedder, James
Rathbone, Tim


Fell, Anthony
King, Evelyn (South Dorset)
Rees, Peter (Dover &amp; Deal)


Finsberg, Geoffrey
King, Tom (Bridgwater)
Rees-Davies, W. R.


Fletcher, Alex (Edinburgh N.)
Kitson, Sir Timothy
Renton, Rt. Hon. Sir D. (Hunts)




Ridley, Hon. Nicholas
Smith, Cyril (Rochdale)
Tugendhat, Christopher


Ridsdale, Julian
Speed, Keith
van Straubenzee, W. R.


Rifkind, Malcolm
Spence, John
Vaughan, Dr. Gerard


Roberts, Wyn (Conway)
Spicer, Michael (S Worcester)
Viggers, Peter


Ross, Stephen (Isle of Wight)
Sproat, Iain
Wainwright, Richard (Colne V.)


Ross, William (Londonderry)
Stanbrook, Ivor
Wakeham, John


Rossi, Hugh (Hornsey)
Stanley, John
Walker, Rt. Hon. P. (Worcester)


Royle, Sir Anthony
Steen, Anthony (Wavertree)
Wall, Patrick


Sainsbury, Tim
Stewart, Ian (Hitchin)
Walters, Dennis


St. John-Stevas, Norman
Stokes, John
Weatherill, Bernard


Scott, Nicholas
Tapsell, Peter
Wells, John


Shaw, Giles (Pudsey)
Taylor, R. (Croydon NW)
Whitelaw, Rt. Hon. William


Shelton, William (Streatham)
Taylor, Teddy (Cathcart)
Wiggin, Jerry


Shepherd, Colin
Tebbit, Norman
Winterton, Nicholas


Shersby, Michael
Temple-Morris, Peter
Young, Sir G. (Ealing, Acton)


Silvester, Fred
Thatcher, Rt. Hon. Margaret



Sims, Roger
Thomas, Rt. Hon. P. (Hendon S.)
TELLERS FOR THE AYES:


Sinclair, Sir George
Townsend, Cyril D.
Mr. Adam Butler and


Skeet, T. H. H.
Trotter, Neville
Mr. Spencer Le Marchant.




NOES


Armstrong, Ernest
Evans, Ioan (Aberdare)
McElhone, Frank


Ashley, Jack
Evans, John (Newton)
MacFarquhar, Roderick


Atkins, Ronald (Preston N.)
Ewing, Harry (Stirling)
Mackenzie, Gregor


Bagier, Gordon A. T.
Faulds, Andrew
Maclennan, Robert


Barnett, Guy (Greenwich)
Fitt, Gerard (Belfast W.)
McMillan Tom (Glasgow C.)


Barnett, Rt. Hon. Joel (Heywood)
Flannery, Martin
McNamara, Kevin


Bates, Alf
Fletcher, Raymond (Ilkeston)
Madden, Max


Bean, R. E.
Fletcher, Ted (Darlington)
Mahon, Simon


Bennett, Andrew (Stockport N.)
Foot, Rt. Hon. Michael
Mallalieu, J. P. W.


Blenkinsop, Arthur
Ford, Ben
Marks, Kenneth


Boardman, H.
Forrester, John
Marquand, David


Booth, Albert
Fowler, Gerald (The Wrekin)
Marshall, Dr. Edmund (Goole)


Bottomley, Rt. Hon. Arthur
Fraser, John (Lambeth, N'w'd)
Marshall, Jim (Leicester S.)


Bray, Dr. Jeremy
Garrett, John (Norwich S.)
Mason, Rt. Hon. Roy


Brown, Hugh D. (Provan)
Garrett, W. E. (Wallsend)
Maynard, Miss Joan


Brown, Robert C. (Newcastle W.)
George, Bruce
Meacher, Michael


Buchanan, Richard
Ginsburg, David
Mellish, Rt. Hon. Robert


Butler, Mrs. Joyce (Wood Green)
Golding, John
Mendelson, John


Callaghan, Rt. Hon. J. (Cardiff SE)
Gould, Bryan
Millan, Bruce


Callaghan, Jim (Middleton &amp; P.)
Gourlay, Harry
Miller, Mrs. Millie (Ilford N.)


Campbell, Ian
Graham, Ted
Mitchell, R. C. (Solon, Itchen)


Canavan, Dennis
Grant, John (Islington C.)
Molloy, William


Cant, R. B.
Grocott, Bruce
Morris, Alfred (Wythenshawe)


Carter, Ray
Hamilton, James (Bothwell)
Morris, Charles R. (Openshaw)


Carter-Jones, Lewis
Hamilton, W. W. (Central Fife)
Morris, Rt. Hon. J. (Aberavon)


Cartwright, John
Hardy, Peter
Moyle, Roland


Castle, Rt. Hon. Barbara
Harper, Joseph
Murray, Rt. Hon. Ronald King


Clemitson, Ivor
Harrison, Walter (Wakefield)
Noble, Mike


Cocks, Michael (Bristol S.)
Hart, Rt. Hon. Judith
Oakes, Gordon


Coleman, Donald
Hattersley, Rt. Hon. Roy
O'Halloran, Michael


Concannon, J. D.
Hatton, Frank
O'Malley, Rt. Hon. Brian


Conlan, Bernard
Healey, Rt. Hon. Denis
Orbach, Maurice


Cook, Robin F. (Edin C.)
Heffer, Eric S.
Ovenden, John


Corbett, Robin
Hooley, Frank
Owen, Dr. David


Cox, Thomas (Tooting)
Horam, John
Palmer, Arthur


Craigen, J. M. (Maryhill)
Howell, Denis (B'ham, Sm H.)
Park, George


Crosland, Rt. Hon. Anthony
Hughes, Rt. Hon. C. (Anglesey)
Parker, John


Cryer, Bob
Hughes, Mark (Durham)
Parry, Robert


Cunningham, Dr. J. (Whiteh)
Hughes, Robert (Aberdeen N.)
Peart, Rt. Hon. Fred


Davidson, Arthur
Hughes, Roy (Newport)
Pendry, Tom


Davies, Bryan (Enfield N.)
Hunter, Adam
Phipps, Dr. Colin


Davies, Denzil (Llaneill)
Jackson, Colin (Brighouse)
Prentice, Rt. Hon. Reg


Davis, Clinton (Hackney C.)
Janner, Greville
Prescott, John


Deakins, Eric
Jeger, Mrs. Lena
Price, C. (Lewisham W.)


Dean, Joseph (Leeds West)
Jenkins, Hugh (Putney)
Price, William (Rugby)


de Freitas, Rt. Hon. Sir Geoffrey
John, Brynmor
Radice, Giles


Delargy, Hugh
Jones, Alec (Rhondda)
Rees, Rt. Hon. Merlyn (Leeds S.)


Dell, Rt. Hon. Edmund
Jones, Barry (East Flint)
Richardson, Miss Jo


Doig, Peter
Kaufman, Gerald
Roberts, Albert (Normanton)


Dormand, J. D.
Kerr, Russell
Roberts, Gwllym (Cannock)


Douglas-Mann, Bruce
Kilroy-Silk, Robert
Robertson, John (Paisley)


Duffy, A. E. P.
Lambie, David
Roderick, Caerwyn


Dunnett, Jack
Lamborn, Harry
Rodgers, George (Chorley)


Dunwoody, Mrs. Gwyneth
Lamond, James
Rodgers, William (Stockton)


Eadie, Alex
Leadbitter, Ted
Rooker, J. W.


Edelman, Maurice
Lee, John
Roper, John


Edge, Geoff
Lever, Rt. Hon. Harold
Rose, Paul B.


Edwards, Robert (Wolv SE)
Litterick, Tom
Ross, Rt. Hon. W. (Kilmarnock)


Ellis, John (Brigg &amp; Scun)
Lomas, Kenneth
Sandelson, Neville


English, Michael
Lyon, Alexander (York)
Sedgemore, Brian


Ennals, David
Lyons, Edward (Bradford W.)
Selby, Harry


Evans, Gwynfor (Carmarthen)
Mabon, Dr. J. Dickson
Shaw, Arnold (Ilford South)







Sheldon, Robert (Ashton-u-Lyne)
Thomas, Jeffrey (Abertillery)
White, Frank R. (Bury)


Shore, Rt. Hon. Peter
Thomas, Mike (Newcastle E.)
White, James (Pollok)


Silkin, Rt. Hon. John (Deptford)
Thomas, Ron (Bristol NW)
Whitehead, Phillip


Silkin, Rt. Hon. S. C. (Dulwich)
Thorne, Stan (Preston South)
Whitlock, William


Sillars, James
Tierney, Sydney
Willey, Rt. Hon. Frederick


Skinner, Dennis
Tinn, James
Williams, Alan (Swansea W.)


Small, William
Tomlinson, John
Williams, Alan Lee (Hornch'ch)


Smith, John (N Lanarkshire)
Tomney, Frank
Wilson, Alexander (Hamilton)


Snape, Peter
Urwin, T. W.
Wilson, William (Coventry SE)


Spearing, Nigel
Wainwright, Edwin (Dearne V.)
Wise, Mrs. Audrey


Stallard, A. W.
Walker, Harold (Doncaster)
Woodall, Alec


Stewart, Rt. Hon. M. (Sulham)
Walker, Terry (Kingswood)
Woof, Robert


Stoddart, David
Ward, Michael
Wrigglesworth, Ian


Stott, Roger
Watkins, David
Young, David (Bolton E.)


Strang, Gavin
Watkinson, John



Strauss, Rt. Hon. S. R.
Weetch, Ken
TELLERS FOR THE NOES:


Summerskill, Hon. Dr. Shirley
Weitzman, David
Miss Margaret Jackson and


Swain, Thomas
Wellbeloved, James
Mr. James A. Dunn.


Taylor, Mrs. Ann (Bolton W.)

Question accordingly negatived.

8.0 p.m.

Mr. Percival: I beg to move Amendment No. 12, in page 3, line 6, leave out subsection (5) and insert:
'() On the application of a council to whom this section applies the Secretary of State, if satisfied that they have recovered all except a negligible part of the sum which it falls to them to recover, may by statutory instrument make an order authorising them not to recover that part; and any such order shall be subject to annulment by resolution of either House of Parliament'.

Mr. Deputy Speaker (Sir Myer Galpern): With this we may discuss Government Amendment No. 13.

Mr. Percival: The purpose of the amendment is to add some safeguard to the power of the Minister to let people off amounts that should be recovered but have not been recovered. The way in which we thought we might best provide the necessary safeguard was by agreeing that it could be provided by order. In Committee we said that it should be provided by order subject to the affirmative procedure. We had in mind that if it were done the House would know what was happening and there would be no queries that might be taken to court whether the Minister had exceeded his powers. We thought that that would be the best way of satisfying all interests. We agreed, however, that it might be a rather weighty procedure for a small matter and, therefore, in the amendment we have changed from the affirmative to the negative procedure.
By Amendment No. 13 the Government have come some way to meet us. I am far from saying that we are satisfied that the amendment goes far enough, but I am

glad to be able to say that I think it goes some way towards meeting the sort of considerations that we had in mind. As there are other stages at which matters like this can be dealt with—of course we would hope that the Minister might even now consider whether he might go a little further than Amendment No. 13—and because we have before us matters of much greater interest and importance to which I am sure the House wishes to proceed, I do not propose to move Amendment No. 12. I say in advance that if Amendment No. 13 is moved formally we shall accept it.

Mr. Deputy Speaker: I thought that the hon. and learned Member was moving Amendment No. 12.

Mr. Percival: I was moving it, but whilst I am on my feet I beg to ask leave to withdraw it.

Mr. Deputy Speaker: Very well.

Mr. Kaufman: I beg to move Amendment No. 13, in page 3, line 9, at end insert:
(5A) If the Secretary of State gives a council an authorisation under subsection (5) above, it shall be his duty, as soon as may be after the end of the year in which he gave it, to lay before each House of Parliament a statement of the amount which the council have recovered and of the amount which he has authorised them not to recover".
I congratulate the hon. and learned Member for Southport (Mr. Percival) on the neat manoeuvre which he has just conducted. I am grateful to him for accepting the amendment. We are seeking to move in the direction which he requested in Committee. I cannot assure him that we shall move still further.

Amendment agreed to.

Clause 4

TERMINATION OF DISQUALIFICATIONS FOR FAILURE TO IMPLEMENT HOUSING FINANCE ACT 1972

Mr. G. R. Strauss: I beg to move Amendment No. 20, in page 3, line 32, leave out Clause 4.
Clause 4 raises a separate and, in a way, a more serious matter than the other clauses contained in the Bill. It is confined to the Clay Cross situation. It proposes to remove the disqualification which has been imposed on the Clay Cross councillors. The surcharge is not affected.
The House will remember that an appeal was made by the Clay Cross councillors to the High Court asking for reversal of the judgment made by the district auditor. The High Court found no mitigating circumstances and condemned the Clay Cross councillors in strong terms. Let me say straight away that I very much regret that party colleagues of mine should have been involved in this affair and should have behaved in a way which they no doubt thought was in the interests of their constituents but which in my view, and in the view of many of my colleagues, is contrary to the interests of good parliamentary conduct.

Mr. Swain: Is it not contrary to good parliamentary conduct if 65 Members go through the Lobby in favour of the Common Market against a three-line Whip imposed by their own party?

Mr. Strauss: I do not think that it is wrong for Members to vote according to their conscience, whether it is a three-line or six-line Whip. I suggest that my hon. Friend's intervention was not relevant. However, what my hon. Friend and I care very much about is the smooth working of our democratic parliamentary system. Any group of people, councillors or anyone else, which defies the law passed by a democratically elected Parliament is weakening our democratic system. I very much regret that it was party colleagues of mine who were responsible for this at Clay Cross.
In defending Clause 4, which removes the penalty of disqualification, a number of arguments were used by Front Bench collegues including my right hon.

Friend the Secretary of State and my right hon. and learned Friend the Attorney-General. It was suggested that several precedents conformed or were relevant to the present case. There has been so much legal argument about the extent to which those precedents are relevant that I do not propose to go into the matter at all.
I accept the fact that similar cases, such as Merthyr Tydfil and Poplar, have some relevance. In the Merthyr Tydfil case, the councillors had their disqualification removed. In the Poplar case, disqualification did not come into the matter as it was concerned with a surcharge. I shall not go into those cases as I am not legally qualified to do so. All I say is that I agree that there are precedents which can be cited, but I do not think that they are relevant in this case.
We have to consider the situation as it is today and, in particular, whether in the 1970s councillors who do not like a recently passed Act of Parliament are entitled to ignore it and to refuse to operate it. We have to consider whether it is desirable that they should thumb their noses at Parliament, ignore its provisions and the laws it passes and get away with it without any penalty.
It has been suggested by some of my hon. Friends that there is here a case for mitigation, that we should regard the action of these councillors with some sympathy and therefore remove the penalties imposed upon them. I repeat that I am not talking about the removal of the surcharge but merely of the disqualificaton of these councillors to sit for the next five years as councillors—or three-and-a-half years, as one-and a-half years has passed since the disqualification occurred.
My hon. and learned Friend the Member for Hackney, North and Stoke Newington (Mr. Weitzman) made several speeches on this subject in Committee. He argued that the councillors themselves received no financial benefit and therefore should not be blamed too severely. That is true, but if they had received some financial benefit they would of course be in the dock. They received what they no doubt enjoyed at the time, glory and hero worship not only in their constituencies but in many parts of the country. Even at the Labour Party conference they were


adulated, and many people spoke of their courageous action in defying the laws of Parliament and refusing to operate them. But true, they did not get any financial benefit.
To appreciate their motive and to take a properly balanced view, it is important to read what was stated in Tribune of 23rd May 1974 by Councillor David Skinner, when he set out the principle on which the councillors operated. He said
To those who accuse us of breaking the law we reply we are keeping the only law accepted by this movement, the principles which stand for the interests of the working class".
Some people may consider that that is a worthy principle but what he is saying clearly is that the only law which he accepts is that which he considers to be in the interests of the working class, even if Parliament has taken an opposite view and has voted in a different way. That principle, to him, is a complete justification for defying the laws of Parliament on any ocacsion. That is a situation which cannot be tolerated by Parliament.

Mr. John Prescott: My right hon. Friend is using the sort of argument which was used about the trade unions. If the people had obeyed the laws of Parliament which made trade unions illegal, trade unionism would not have been born. The argument about obeying the law, especially in regard to trade unions, was faced by the working class many years ago.

Mr. Strauss: I am well aware of that. My hon. Friend is going back to the early part of the last century, but this situation is not similar. Here an Act of Parliament was passed which laid down certain action to be taken by district councils. The Act laid down that if councils did not take that action certain penalties would flow. In such circumstances, for any councillor to say, "My view is superior to that of Parliament and I will operate what I think is in the interests of the workers and not what Parliament says is in the interests of the workers", means that parliamentary democracy is at an end. If that attitude were adopted on a large scale, we could not pass law—

Mr. Bob Cryer: What is my right hon. Friend's view on the right hon. Member for Brighton, Pavilion (Mr.

Amery), who was Minister at the time? He was given power under the Act to send in a housing commissioner it councillors refused to carry out the terms of the Act, and was so requested. What is my right hon. Friend's attitude towards a Minister who deliberately refused to implement that section of the Act?

8.15 p.m.

Mr. Strauss: That point was raised earlier in the debate. The Minister was not compelled to send in a housing commissioner; he had a choice. Rightly or wrongly, he refused to do so for reasons we know. He was convinced that if a housing commissioner were appointed in this area such was the atmosphere of revolt that it would have been quite impossible for a commissioner to operate. My hon. Friend asked my view on a Minister who did not send in a housing commissioner. My answer is that the Minister was not forced to do so by the law. He acted within his discretion, he said "No", and there is no objection that one can take to that.
The simple case I put is that for any group of people—councillors or anyone else—to consider that they are above Parliament, to take action of which Parliament has disapproved, to say that their understanding of the interests of the workers is higher than that of Parliament and they will do what they think is right, is a bad thing which should be condemned by the House. If that attitude were allowed to continue, our parliamentary democracy would come to an end. I consider that our system of parliamentary democracy is of supreme importance and should be safeguarded at all costs.
It is suggested by my hon. and learned Friend the Member for Hackney, North and Stoke Newington that a plea of mitigation should be considered in respect of these councillors. He put forward that argument so effectively and movingly in the Second Reading debate that I made up my mind that should I ever be in trouble in the courts and want counsel to plead mitigation on my behalf I would ask him to do so.
Every one of us supports mitigation and compassion in all appropriate cases, but surely my hon. and learned Friend would have great difficulty in making a plea of mitigation in a court on behalf


of someone who had admittedly committed an offence unless that person was to some extent repentant of the offence, had some plausible reason for committing it and promised not to do the same thing again. In those circumstances, a plea of mitigation might be effective, but that has not happened here.
Although we cannot go into this in detail, we learn from the report of the district auditor who has looked into the affairs of Clay Cross that there has since been a complete disregard of the standards established for municipal administration, and there has been no promise—

Mr. Skinner: And no breaking of the law.

Mr. Strauss: These people have made no promise not to do the same again. I understand their attitude, although I do not sympathise with it and it is a dangerous one. They think that they are justified in breaking the law whenever it is in the interests of their constituents that they should do so.

Mr. Weitzman: My right hon. Friend must remember that the opinion of the district auditor on further surcharges is under appeal. He is therefore not entitled to say now that these offences have been committed.

Mr. Strauss: I do not intend to pursue that matter, but the district auditor's report is quoted in the newspapers and is not a secret. I admit that it is subject to appeal and that on appeal the charges may be turned down. The attitude of these councillors, both before and after the Housing Finance Act went through Parliament, is one of complete independence from parliamentary action. Therefore, I do not think a plea of mitigation can be accepted since these people did not give any indication—I put it no higher than that—that they would obey the principles of good government or the laws of Parliament after this affair was over.
The penalties which these councillors are suffering and which will be removed under the Bill are not terribly serious for people who have done the various things which it has now been agreed they have done, namely, to defy the laws of Parliament on important matters. There is

no question of any financial penalty being imposed on them. There might be a feeling of sympathy if we said, "Look, this penalty will damage them, their families and their children". But that does not arise in the slightest. No feelings of compassion can be aroused on those grounds.
The only penalty we are talking about is that these people should not be allowed to serve as councillors for another five years. Now it is three years, because one-and-a-half years have passed. Is that such a serious penalty? Cannot it be said that, for the protection of the public and ratepayers generally, it is desirable that people who have grossly defied Acts of Parliament in the administration of their council affairs should, when a report such as this one is made by the district auditor and upheld by the High Court, suffer the penalty?

Mr. Skinner: Tell us about Stone-house.

Mr. Strauss: I will always listen to a serious interruption by my hon. Friend, but I really do not know what my right hon. Friend the Member for Walsall, North (Mr. Stonehouse) has got to do with the issue.

Mr. Skinner: Oh no, of course not.

Mr. Strauss: I do not think that my hon. Friend advances his case at all by mentioning the right hon. Member in any way in support of his case or against my argument.
Therefore, the sole burden on the Clay Cross councillors is an inability to stand as councillors or to act as councillors for three-and-a-half years. This clause seeks to remove that burden. In other words, it says to them "Although you have defied Parliament and disobeyed the laws, no penalty shall be imposed upon you at all." Parliament, if it wants to preserve its authority, should not say that, but it is what Clause 4 proposes. It is for that reason that Clause 4 should be omitted.
The case has been repeatedly put by the Attorney-General and by other Ministers that they want to wipe the slate clean. That is an evocative and attractive proposal, but I do not quite know what they mean by it. I should have thought that the best thing to do was to leave matters as they are. Nullifying the decisions of the High Court, if that is


what they mean, would not wipe the slate clean at all.
It is a mucky situation. The Government have left the surcharge, and all they are proposing to do is to remit the remaining few years of the disqualification. That is not a clean situation at all. It is not particularly attractive, nor should such a situation appeal to the House. Obviously, it would be much better to leave matters as they are, so that the decision of the High Court is not interfered with by Parliament.
At a time when the democratic basis of our society is under some threat, it is right that we should uphold the authority of Parliament, whenever, wherever and by whomsoever that authority is challenged. In no circumstances should we condone the deliberate defiance of Parliament. Because this clause does so, I move, with the support of some of my hon. Friends, that it be omitted from the Bill.

The Secretary of State for the Environment (Mr. Anthony Crosland): Clause 4 is, of course, the most contentious part of the Bill—a ll Clause 4s prove contentious. It has been attacked not only by the Opposition but also by some of my right hon. and hon. Friends for whom I have the greatest respect. The arguments they have put forward are extremely serious.
With a great deal of what my right hon. Friend the Member for Vauxhall (Mr. Strauss) said I am in entire agreement. For example, I am in agreement with him, and not with my hon. Friend the Member for Kingston-upon-Hull, East (Mr. Prescott), about the oft-quoted precedents of trade unions breaking the law in order to establish their simple democratic rights. The basic difference between that situation and the situation we have now is that then there was not adult suffrage and now there is adult suffrage. Therefore, I agree with my right hon. Friend on that matter.

Mr. Prescott: One does not necessarily have to rely on precedents so far back, though the principle remains the same; but I recognise part of the argument being put forward. Perhaps my right hon. Friend could look also to the new trade union legislation that was brought in by the Opposition when they were in

power. It was clearly being defied in a number of areas and caused a great deal of consternation. We repealed that because we considered that it failed in its purpose. It failed to solve many of the problems, and we did not condemn any of the actions against that legislation.

Mr. Crosland: I am not aware that any of the actions against that are on all fours or parallel with the kind of situation we are discussing now. I do not believe them to be so. I had better return to the matters we are discussing now, which are controversial in themselves, without going very much wider.
Contrary to what my right hon. Friend the Member for Vauxhall said, I do not believe that there could be a clean situation here whatever we decided to do. Having thought this matter over most carefully, at the end of the day it remains the view of the Government that the House should reject the amendment before it. I should like to say, briefly, why.
The broad argument in favour of the amendment is that Clause 4 represents a dangerous threat to the rule of law. When the Bill was first introduced the argument was put even more strongly. It was said then that the Bill was not only a breach of the rule of law but was a breach without precedent. We have argued the matter of precedents up hill and down dale in Committee, and in particular we have argued about the Chamberlain precedent of 1927 and the Merthyr school milk precedent. I do not intend to rehearse those arguments once more.
I found, as I think my hon. Friends generally did, the case presented by my hon. and learned Friend the Attorney-General in our debate on Clause 1 overwhelmingly convincing, and I am sorry that my right hon. Friend dismissed this precedent and, indeed, walked out half way through the Attorney-General's speech. I hoped that he would listen to the end of that speech.
However, precedent or no precedent, the charge that we are endangering the rule of law stands and must be answered. As the point has been raised so often I must clear up this fact, that there has never been any question of our arguing for defiance of the law. Far from it.


As I said on Second Reading, and as many of my hon. Friends know, I fought a long and at times unpopular battle within my own party against those who supported a policy of non-implementation.
My right hon. Friend the Leader of the House has been criticised for what he said on this matter when in Opposition. In fact, he made the position of the Labour Party Executive quite clear on this subject. He told the Labour Party Conference in 1973:
The NEC cannot possibly advise Labour councillors to act unlawfully. We cannot.
So the Labour Front Bench came out against unlawful defiance of the Housing Finance Act. On the whole, we succeeded, but in a few cases we did not.
That leaves us with a mess to sort out. This, as I said on Second Reading, is one of those difficult questions of clemency, of partial amnesty and of indemnity which have troubled many different Governments in many different circumstances.
This Bill, and Clause 4 in particular, cannot be seen as undermining the rule of law. It is recognition of an unfortunate reality. The reality is a situation which has arisen, and the reality is, as the Opposition admit, that we must get out of it. Clause 4 is part of our solution.
Let me remind the House of what Clause 4 does not do. It does not retrospectively annul the £7,000 surcharge levied on the Clay Cross councillors and upheld by the courts. There is to be no indemnification against this surcharge. Nor will this surcharge, or any other surcharge under the Housing Finance Act, be met from public funds. In some quarters—not those quarters which my right hon. Friend the Member for Vauxhall inhabits—this decision has been very sharply criticised. The Labour Party Conference in 1973 demanded that
upon the election of a Labour Government all penalties, financial or otherwise, should be removed retrospectively from councillors who have courageously refused to implement the Housing Finance Act 1972.
8.30 p.m.
As my right hon. Friend knows, I have declined to implement that resolution. I have refused to remove the financial penalties imposed on these councillors. I

have been very bitterly attacked as a result, by one of them in a letter to Labour Weekly in which he described my action as "a complete and utter sellout" of Labour Party Conference decisions. That may be his view. I remain quite unrepentant about my view.
Nor is our decision to end the disqualification retrospective. By the time the Bill becomes law the councillors will already have been disqualified for a considerable period. I am not trying to lift that disqualification with retrospective effect. It stands and it will stand on the record.
What Clause 4 does is to shorten the period of disqualification by bringing it to an end when the Bill is passed. We have done this because we feel that it helps to make the Bill more consistent and fair.

Mr. Peter Rees: Will the right hon. Gentleman explain how the retrospective removal of a disqualification would assist the gentlemen concerned? Does it mean that retrospectively they could have stood for the new successor council?

Mr. Skinner: They are on it.

Mr. Crosland: My argument related to and was in the context of a resolution passed at the Labour Party Conference in 1973 which used the term "retrospective removal of disqualification". I acknowledge that the Clay Cross councillors were not only misguided but persistently misguided. But this is the crux of the argument, and I hope that my right hon. Friend the Member for Vauxhall will listen with care. We considered it wrong for them to stay disqualified for failing to implement the Housing Finance Act when other councillors were to be released under this Bill from the threat of similar disqualifications.
Our views are that, without Clause 4, the Bill would be inconsistent and unfair. That is the crux of the argument for Clause 4. It is not related to the point about the Housing Commissioner to which my right hon. Friend referred, though that is relevant and I shall have a word to say about it later. It is not an act of mitigation of the kind he was discussing. The crux of the matter is that we should have been inconsistent and unfair had we lifted the threat of disqualification from


all the other councillors while allowing the Clay Cross councillors to stay disqualified for failing to implement the Act.
Without Clause 4 the Bill would not go the whole way to wipe the slate clean. It was this wish to clean up the whole mess left by the Housing Finance Act which led to the Prime Minister's commitment in a statement to the House on 4th April 1974 to remove the civic disqualification incurred by the former councillors at Clay Cross.
An interesting point to emerge from the Opposition's alternative approach, as embodied in new Clause 1, is that on the principle of shortening the period of disqualification arising from a surcharge there is no difference between the two sides of the House. A disqualification is not for life. It comes to an end, and those involved can then become councillors again. New Clause 1 provided for the courts to impose a shorter period of disqualification. Speaking to a similar amendment moved in Committee, the hon. Member for Aylesbury (Mr. Raison) said that:
we want to make it possible for the courts to say that a councillor should be disqualified, but that disqualification need not necessarily go to the full term of five years."—[Official Report, Standing Committee D, 8th April 1974, c. 20.]
The Government are proposing that the decision to shorten the period of disqualification in the case of Clay Cross councillors should be taken here in Parliament and not in the courts. The Opposition will dislike the idea of shortening the period in the case of Clay Cross, but I understand that there is little difference of principle between the Government and Opposition over whether the five-year period should be rigidly adhered to, or whether there should be provision for shortening it in certain cases. It is a matter of judgment—indeed of disagreement—whether it is right to shorten it for the Clay Cross councillors.
We see it not as as act of mitigation, or as a matter of whether the Housing Commissioner should have gone in earlier. We see it in terms of making the Bill consistent and fair, taking the Bill as a whole, as between all councillors—the 400 or so who declined to implement the provisions of the 1972 Act.
I want next to refer to the fresh surcharges, totalling roughly £52,000, on the former councillors of Clay Cross.
Here I must refer to a point which has been made in some recent Press comment. If, as has been reported—and I do not know the truth—the councillors concerned have appealed against these latest surcharges, which have nothing to do with the Housing Finance Act, the matter will be in the hands of the courts. Whatever happens, I have no intention of bringing before this House legislation to relieve them in respect of those surcharges. I hope that that dispels any doubt about the matter that may exist.
I emphasise again, if it needs emphasis, that these surcharges, amounting to £52,000, concern items of expenditure which have nothing whatsoever to do with the Housing Finance Act or with this Bill. I must also make it quite clear that these surcharges are made by the district auditor and that a right of appeal lies not to me but solely to the courts under the Local Government Act 1933. Provision is made in Section 229 of that Act for appeal to the courts, and in section 230 for application to the court for relief. Any such appeals for applications must be made within six weeks of the date of the surcharge.

Mr. Swain: Will my right hon. Friend also quote the section of that Act which says that if the surcharge is less than £500 per person—and it is in respect of 10 of the individuals—there is a right of appeal to the Minister, but that if it is more than £500 they must appeal to the Divisional Court?

Mr. Crosland: I am afraid that I cannot quote the section because I do not have it before me. I believe what my hon. Friend says to be correct, but, to make assurance doubly sure, I will ask whichever of my hon. Friends winds up the debate to quote the provision that my hon. Friend has in mind.
It has been reported that the Clay Cross councillors will appeal. I do not know whether this is so. There have been two contradictory reports in the past two days. Whatever they do, the proper course for Government Ministers is to refrain from any comment which might in any way be held to be prejudicial to anyone's interests or to the fair and impartial consideration of any further proceedings on the surcharges.
We must consider Clause 4 in terms of today's situation and as part of a Bill


to deal with matters arising solely from the Housing Finance Act, but, if the situation were reached where Clause 4 would have no practical effect, of course we would consider the matter again.

Mr. Paul Channon: Will the right hon. Gentleman confirm that, if the Clay Cross councillors were to appeal to the High Court only to have their appeals turned down, or if they refrained from appealing, and the surcharges stood, they would be disqualified for a further period of five years?

Mr. Crosland: That follows absolutely and completely. If either event occurred, we would reconsider the whole matter of Clause 4 in what would then be a completely different situation.
Finally, we must keep a sense of proportion about Clause 4. Clay Cross and this clause have become the focus of criticism in this whole matter of default under the Housing Finance Act and have received the lion's share of the publicity. I accept that the ex-councillors of Clay Cross deliberately and wrongly defied the law. There is no argument about that, but there are members of almost 20 other authorities who will probably also be found by the district auditors to have acted in such a way that in the normal course they would be surcharged and, under the Bill, would be subject to rent loss certificates. I must maintain parity of treatment between those many councillors and the Clay Cross councillors who have been surcharged already—

Mr. Skinner: Some of them are pro-Marketeers.

Mr. Crosland: The main difference between Clay Cross and the other councils is that at Clay Cross a surcharge was imposed for part of the loss of rent because the Tory Government chose to impose an extraordinary audit after a short period of time.
Here, I refer to the point about the Housing Commissioner. I remind the House of what I said on Second Reading. When the Housing Commissioner was finally sent into Clay Cross The Times, which has thundered fairly heavily against what we propose in this Bill, said in an editorial:
Once the case"—

that is Clay Cross—
had become an isolated one, it would have been better to stop the arrears mounting up, for they could only add to the drama of the affair. … The surcharge is a necessary weapon of last resort, but it is unwise for a Government unnecessarily to give anyone the opportunity of making a martyr of himself.
That passage appeared in The Times. Unfortunately, that is precisely what the Conservative Government did.
I also remind the critics that, if Clay Cross had been in Scotland, these councillors would not have been disqualified, for in Scotland no disqualification attaches to a surcharge, whatever its size.
Clause 4 is needed to maintain consistency of treatment between the 400 or so councillors who declined to implement the 1972 Act. If in the future the situation changes, I shall, as I have said, reconsider the need for it, but for the moment I must ask the House to reject the amendment.

Mr. Percival: The opening speech in the debate was one which I am sure all hon. Members will have felt was as courageous as it was convincing. It was very fitting that it should have come from the right hon. Gentleman who is the Father of the House, because it was a speech in defence of the principles for which the House should stand, if it stands for anything, the defence of parliamentary democracy.
It will not go unnoticed that the collection of hon. Gentlemen—and I call them that because it is customary—who occupy the Front Bench below the Gangway seem to have no regard whatsoever for those principles.

Mr. Skinner: Tell Christopher Soames.

Mr. Percival: It is equally regrettable—no, it is not equally regrettable, because nothing could be quite so regrettable as the conduct of the hon. Gentlemen on the Front Bench below the Gangway—it is regrettable that the Secretary of State is even now—having heard those views expressed so clearly and so forcibly by the Father of the House—not prepare to accept them.
The debate is not over. Perhaps even yet there will be some shift of opinion on the part of the Government.
I shall make one or two observations which I hope may reinforce the argument


presented by the right hon. Gentleman the Member for Vauxhall (Mr. Strauss). Let me make it clear to the Secretary of State that he is quite right when he says that we persist in the contention that the passage of the Bill would engender—I mean endanger—the rule of law.

Mr. Cryer: I am most grateful to the hon. and learned Gentleman. He is reading his speech in rather a slipshod manner, but I am grateful for the opportunity to intervene. How is it that he and his hon. Friends can talk about parliamentary democracy and its preservation when they are prepared to sell out to the Commissioners in Brussels? Does he not accept that there will be a shift of power away from Parliament to Brussels if we stay in the Common Market? Is not the corollary that we should vote "No" in the referendum in order to preserve the parliamentary democracy he claims he wants to defend?

Mr. Percival: If the hon. Gentleman really believes that I am reading he had better look at my notes. As to the second part of his intervention, in a way I am glad I gave way because, although what he has said is totally irrelevant, it indicates to the House the views of the hon. Gentlemen on the Front Bench below the Gangway.
The Secretary of State said that the Bill he was dealing with was one of those difficult questions of clemency that have troubled many Governments. He went on to quote the Audit (Local Authorities) Act 1927. That Act was not an act of clemency. It was described by the Labour Party, which was than in Opposition, as an Act designed to suppress local government. That measure introduced far greater penalties than ever before, and it was described by the right hon. Gentleman's predecessor, the then Opposition spokesman, as an Act designed to suppress local government.
8.45 p.m.
The right hon. Gentleman suggested that he and his Cabinet colleagues were declining to implement Labour Party conference resolution No. 191. But all financial penalties, as well as disqualification, have been removed from the 400 councillors who, the Government say, are still in danger. That resolution has been fully implemented in regard to them. The effect

of Clause 1 is that nobody who has not yet been surcharged, but who would otherwise be surcharged, will be surcharged in respect of any of the losses resulting from failure to implement the Housing Finance Act. The Government say that that clause is necessary because up to 400 councillors stand in danger of having that happen to them, not for anything they might do in the future but for something they have done, the consequences of which they cannot escape except by the passage of the Bill.
Therefore, what is being done is to implement the substance of the resolution in regard to all those people. The Bill relieves them of the otherwise inevitable consequence of suffering financial penalties and being disqualified, but it does it in advance rather than waiting until it has happened. It is a specious argument in those circumstances to say that the Secretary of State is refusing to implement the resolution. The only way in which he is refusing to implement it is by refusing to relieve the Clay Cross councillors of the present surcharge of £6,900, or thereabouts.
It is said that that surcharge will be paid by means of a levy raised within the party. We are still waiting to hear that it has been raised, that steps are being taken towards raising it, or even that somebody feels so strongly about the plight of those concerned that he is volunteering to raise the money. That is the only penalty of all the penalties which would otherwise be suffered which is not being relieved by the Bill.
It is plain that the effect of Clause 4 is small compared with the effect of Clause 1. The curious thing is that, having first let the impression be spread that Clause 4 was the important one, because that was the one that removed disqualification, the Government having got past Clause 1, which does far more than Clause 4 would do. They now say that because Clause 1 is in the Bill they must have Clause 4, because not to have it would be unfair to those few covered by Clause 4.
There is some argument in that if it would mean that the 11 were the only ones left out. That may support the case of the hon. Member for Bolsover (Mr. Skinner), but it does not support the Government's case. The Government cannot


now say that because they have taken so big a step as to relieve of all liability up to 400 councillors, many of whom are far more important to the Labour Party than those of Clay Cross, they must also relieve those affected by Clause 4.
There is a dilemma, a dilemma entirely of the Government's own making. It is not one that the House should allow to lead it into letting the clause remain in the Bill.
The Secretary of State referred to the precedents. I shall resist the temptation to refer to them again. One of the differences between Clause 4 and Clause 1 is that we know what was done by the people to whom Clause 4 relates. We do not even know yet how many people are affected by Clause 1, let alone who they are or precisely what they did. We do know what was done by those affected by Clause 4. Therefore, we can see in relation to them how far the views expressed by the Attorney-General in the opinion he gave in 1972 are applicable to the circumstances as we know them in respect of the Clay Cross councillors.
I have always accepted that the question the right hon. and learned Gentleman was asked which led to his giving that opinion were not precisely the questions which now arise. But I have always said that the answers should be the same because there is no difference in principle, and I should like to demonstrate what I mean. The right hon. Gentleman said:
I know of no example of legislation by one Parliament to recompense persons or organisations for financial penalties incurred in consequence of refusing to obey the requirements of legislation passed by a preceding Parliament.
Therefore, he contemplated that persons would refuse to obey the requirements of legislation. He was contemplating legislation which said "You must do so and so" and people replying "We know that you say that we must do this, but we shall not do it." Those words are directly applicable to the case of Clay Cross, because in September 1972 the people involved passed a resolution stating that they would not do what the Act required of them.

Mr. Skinner: The hon. and learned Gentleman may be surprised to learn that the Clay Cross councillors passed a resolu-

tion early in 1972 indicating to the then Secretary of State for the Environment that they would not implement the Act. They said that they would not collect the extra £1 which was due to be paid under the Bill when it became law. They also declared at their council meeting—this was well publicised—that the Government should send in their housing commissioner to collect the rent. What is more important, they made it abundantly clear that they would not obstruct him. The only reason why the obstruction took place 12 months later was that they were dragged through the courts by the then Tory Government.

Mr. Percival: The hon. Gentleman has put forward these totally spurious arguments so often. They have been dealt with time and time again. There was no obligation on the Minister. The Minister, in these circumstances, had four alternatives. That was decided by the Court of Appeal, which said that the Minister was under no obligation as to which to choose. That is a different matter.
In the first part of his intervention the hon. Gentleman supported what I said—that the Clay Cross councillors refused to obey the requirements of the legislation passed by Parliament. The only difference is that the Attorney-General said that there was no example of a Parliament recompensing persons or organisations for financial penalties incurred through doing that. What is the difference in principle between recompensing people for penalties which they have incurred or relieving them of penalties which they will incur if the existing processes of law are completed? I suggest that there is no difference in principle. What the Attorney-General said was as relevant to Clause 4 as to the question to which he previously addressed his mind. He went on to say:
An Act of Indemnity passed for this purpose would, in my opinion, contravene all constitutional practice and would set a dangerous precedent.
Every word of that is applicable to Clause 4. He went on to say:
Moreover, the expression of an intention by a political party to pass such legislation in the event of such a party being returned to power could only be construed as incitement to those concerned to refuse to obey the law; such an expression of intention would, therefore, also set a dangerous precedent.


Every word of that is equally applicable to what was done by the Clay Cross councillors with the encouragement given to them by their seniors in the party who should have known better and are now driven to rescue them from the consequences.

Mr. Skinner: And the others.

Mr. Percival: And the others.

Mr. Skinner: So what is the difference?

Mr. Crosland: This is important. The hon. and learned Gentleman says "And the others".

Mr. Skinner: Yes.

Mr. Crosland: But the others, even though they are not having so extreme and thorough a solution applied to them as we propose, under new Clause 1 will not have visited upon them the full penalties of the present legislation. The hon. and learned Gentleman must constantly concede that the others are being helped and relieved by new Clause 1 which he proposed.

Mr. Percival: The terminology used by the Secretary of State presupposes that new Clause 1 had been carried. If it had been carried, there would be some force in what he said. But new Clause 1 has been rejected by the Government. The result is that all the other councillors who defied the law—about 400 of them—will be totally relieved under Clause 1. That is why I agreed with the hon. Member for Bolsover when he referred to the others.
The next observation made by the Attorney-General in the opinion which I was quoting before being interrupted continued:
It is my opinion that no Law Officer of the Crown, of any political party, would be likely to advise the Government of which he was a member to initiate such legislation.
It is because we can see no difference in principle between what is happening now and what the Attorney-General was saying then that we are surprised to find a Law Officer of the Crown supporting such a Bill.
Another point made by the Attorney-General was that if we took steps to relieve the people who had defied the law of the consequences of what they had done,

we would create all sorts of anomalies, because other people would have to bear the burden. That is a further consideration that arises here and a further reason given in the opinion for the views he expressed which are equally applicable in present circumstances. I suggest that if any hon. Member doubts the applicability of the views expressed by the Attorney-General in that opinion, he ought to have another look at it.
The Attorney-General was right in what he said in 1972. He has never tried to say that he said anything different in 1972 from what he did say then. His error is in refusing to accept that the principles are equally applicable to the circumstances today as they were to the precise questions put to him then.
Lastly, I want to deal with the remaining point made by the Secretary of State, which was that, in effect, there is a similarity between what we were suggesting in new Clause 1 and what the Government are doing. We were suggesting that the court might have power to reduce the period of disqualification, whereas in the Bill the Government are taking the decision to shorten the period.—What bunkum. There is no comparison between that and the powers and the rights which would have been given under new Clause 1. The question whether the period of disqualification should be shortened should be decided by a wholly independent party with full knowledge of the facts and after hearing representations on behalf of those concerned from all points of view. It is a totally different matter.
The falsity of what the Secretary of State is suggesting may be finally demonstrated in this way. Supposing that there were any sense in our saying that we should consider reducing the period. We should first look at the facts. Under the Labour Government in 1969–70, the councillors affected by this clause were already being warned by a Labour Minister, the hon. Member for Barnet, East (Mr. Freeson) that they had better he careful.
9.0 p.m.
Talking of the councillors' actions which led to the surcharge, Lord Denning said:
It lay ill in the mouth of the councillors to say that the minister had acted unlawfully. Each of them"—


that is, the councillors—
had deliberately broken the solemn promise which he had given when accepting office. Each had flagrantly defied the law. Each was determined still to continue to defy it. … The men were not fit to be councillors. The sooner they were disqualified the better.
He also said:
The time had come when they must be told quite firmly that the law had to be obeyed. Their disobedience could not be tolerated. They were disqualified. They must stand down.
Those are the facts on which the House should be acting.

Mr. Swain: I must remind the hon. and learned Gentleman and the House that that was an opinion, not a legal fact, that Lord Denning used in his summing up of that case. May I also remind him that in the subsequent election at Clay Cross the new council was elected by 72 per cent. of the electorate on the same mandate as the previous council? That was the answer to Denning.

Mr. Percival: If hon. Members think that that is the answer to a view expressed by a person of the eminence of the Master of the Rolls in a wholly independent tribunal, they are entitled to their view, but I should not expect it to be one which would enjoy much credence in the House.
That is not all. We now have another report from the auditor, in which we are told that there are further losses of £100,000 which resulted from the refusal of the Clay Cross councillors to implement the Act. This is in addition to all the other sums for which they have now been surcharged, amounting to £52,000, in addition to the £25,000 interest on capital borrowed to finance revenue, and in addition to another sum which escapes me for the moment.
All this led the district auditor to say in the last paragraph of his final report, having given details of losses, unlawful payments and so on totalling £192,813:
These figures provide a measure of the extent to which the interests of the ratepayers were disregarded by the members of the UDC in their deliberate defiance of the laws which it was their duty to administer—

Mr. Swain: On a point of order, Mr. Deputy Speaker. Some time ago your predecessor in the Chair ruled out of order discussion of the subject which the

hon. and learned Member is now discussing.

Mr. Deputy Speaker: I was not aware that this matter had been raised with my predecessor in the Chair, but so far I do not think there is anything strictly out of order.

Mr. Swain: Further to that point of order, Mr. Deputy Speaker. There is an appeal lodged and the case is sub judice according to the rules. Perhaps you would care to check up.

Mr. Deputy Speaker: I remind the hon. Member that the sub judice rule does not apply when legislation is being discussed.

Mr. Percival: I am obliged for your assistance, Mr. Deputy Speaker. I shall read that passage again since I was stopped in the middle of it. It said:
These figures provide a measure of the extent to which the interests of the ratepayers"—
and let us never forget that councillors are trustees for all their ratepayers, not just a few of them—
were disregarded by the members of the UDC in their deliberate defiance of the laws which it was their duty to administer. Looking at the picture of their activities in 1972–73 and 1973–74 it is evident that their defiance of the Housing Finance Act 1972 was only the first step in the path of lawlessness along which lay their subsequent decisions and action.
These are the people whom the Secretary of State believes should have their period of disqualification shortened. The quotations I have read are from the only independent material that is available to the House. No wonder it is said that if we pass the Bill it must inevitably result in monstrous harm by proclaiming that those who spit upon the law may do so with impunity provided they do so in a sectional political interest. That is the sort of thing we are asked to support in Clause 4.
The whole House should be grateful to the Father of the House for so clearly putting the arguments for not having this clause, and should support him in the Lobby in his endeavour to see that the House upholds the principles of which it has been proud for so long. I assure him that my right hon. and hon. Friends will support him to the full and with glad hearts.

Mr. Weitzman: I am sure that the Opposition will support my right hon. Friend the Member for Vauxhall (Mr. Strauss). They are only too glad to get hold of any stick with which to beat the Government. I have great regard for my right hon. Friend. He has presented his case, but I do not agree with him. The hon. and learned Member for Southport (Mr. Percival) seems to think—he said it several times—that because this is an opinion of the Father of the House we should pay special regard to it. My right hon. Friend is the Father of the House and I have regard for him, but I am a little older than he is and perhaps the hon. and learned Gentleman will pay some attention, therefore, to what I am about to say.
I noticed that the hon. and learned Member talked about the opinions of the Government benches below the Gangway. He knows perfectly well what my view is. I do not know whether he puts me with them on this matter. I have, naturally in my profession, a very great regard for the law and I agree that one should not sanction any breach of the law. I deplore any action which is a breach of the law. Parliament is supreme in making the laws, and whether the laws are good or bad they should not be broken. If we want to attack or change them we must do so by constitutional means.
The hon. and learned Gentleman said
Let us look at the facts as they are.
I invite him to do just that. What happened? An iniquitous Act, which we were all highly indignant about and on which we expressed our indignation at the time—the Housing Finance Act—was passed. It attacked the system by which local councils fixed rents. Local councils were extremely annoyed and indignant about it, just as we were.
What did the local councillors at Clay Cross do? They expressed their indignation. They said "We will not implement the Act. We will not carry out the provisions of the Act." That was clearly a breach of the law. But they also said, and my hon. Friend the Member for Derbyshire, North-East (Mr. Swain) on this much despised front bench below the Gangway got up and told the hon. and learned Gentleman that they made that quite clear to the Minis-

ter. They said that they wanted him to send in a housing commissioner to deal with the position.
We know that the Minister had the power to send in a commissioner and we know that he did not need to send one in if he did not wish to. What an action on the part of the Conservative Government! They were told explicitly by the council that it would not implement the Act and that it wanted a housing commissioner sent in. Why did the Tory Govmiment not do that?—instead of leaving the Clay Cross Councillors to break the law. Was that not a disgraceful act on the part of the Tory Government?
I do not think that the councillors at Clay Cross acted within the law. They were clearly in breach of the law. But, to adopt once again the words used by the hon. and learned Gentleman, let us look at the facts. They did not do what they did for their cwn benefit. They were representatives of the citizens. They took the view that they ought to refuse to implement the Act. They were wrong although they genuinely thought that it was in the interests of their constituents. We all agree that they were wrong and that they committed a breach of the law.
My right hon. Friend the Member for Vauxhall said that when I had previously made a speech on this subject I had given no plausible reason for the mitigation of the penalty. Let us see whether there is not some plausible reason. I am sure that if my right hon. Friend is satisfied that there is such a reason he will support the Government. I have said that the councillors asked the Government to send in a commissioner. They made it clear that they would not obey the law. They acted sincerely, believing that they were acting in the interests of their constituents. They did not act in any way for their own benefit. Is that not a plausible reason to be considered in mitigation?
The hon. and learned Member for Southport is a member of the Bar. He has taken part in criminal cases and has defended someone who has committed a dreadful crime. He has got up and put every point he could in mitigation. The judge has taken these points into account in imposing sentence. What has happened here? The Clay Cross councillors


have suffered the penalty of the surcharge. They are not being relieved of that. They suffer the penalty of disqualification until the date when under the Act by reason of Clause 4 they will be relieved of it. They are being punished by surcharge and disqualification. It is only right that we should consider that and their motives in mitigation of their case.
The Opposition are a jolly sight worse—I nearly said "a damned sight worse" but I had better not—than the Tory Government of 1927. In that year, until the end of October 1927 the Poplar Council defied the law. In their mercy the then Tory Government said "We shall relieve you of any surcharge until the end of October 1931". Although the hon. and learned Member for Southport has put forward all sorts of arguments about that, that fact is crystal clear. There one has mercy exercised by a Tory Government. That is a quality which seems to be denied by the Opposition tonight.

9.15 p.m.

Mr. Percival: Will the hon. and learned Gentleman bear in mind that from start to finish of the discussions that took place on the 1927 Bill there was, so far as I can see, no suggestion from anyone that it was a merciful Bill. On the contrary, the hon. and learned Gentleman's predecessors in the Labour Party said that it was a monstrous Bill, a Bill to suppress local Government.

Mr. Weitzman: Of course they said it was a monstrous Bill. However, it was a Conservative Government who mitigated to an extent the position of the Poplar councillors. That is crystal clear, and that cannot be denied. I note that the Opposition are not ready to extend any mercy tonight. I say that if it were only for that reason and that reason alone—namely the question of mitigation—the clause would be right.
The hon. and learned Gentleman has tried to attack the other point that was made most strongly by my right hon. Friend the Secretary of State. The hon. and learned Gentleman has said that under Clause 1 the 400 other councillors have been relieved. Therefore, he asks "What does Clause 4 do apart from relieve the Clay Cross councillors?" My

right hon. Friend has spelt out the position. He has said that we should have consistency, and that as we have relieved the other councillors we should also relieve the Clay Cross councillors.
The hon. and learned Gentleman has also sought to criticise my right hon. and learned Friend the Attorney-General. He tried to show that the question which my right hon. and learned Friend answered was equally applicable to the position today. I remind the hon. and learned Gentleman of the question. My right hon. and learned Friend said:
You asked for my considered opinion on the possibilities and difficulties of a future Labour Government initiating legislation to recompense trade unions, councillors or both who suffer financial loss in consequence of the operation of the Industrial Relations Act or the Housing Finance Act.
The vital words were "who suffer financial loss". My right hon. and learned Friend answered quite correctly. It is absurd for the hon. and learned Gentleman to try to compare that with the position of disqualification under Clause 4. His analogy does not stand up if it is considered carefully.

Mr. Percival: The hon. and learned Gentleman has said that I said the question was the same. I did not say that. I said that I recognised that the question was not the same but that the answers should be the same for the same reasons.

Mr. Weitzman: I appreciate that the hon. and learned Gentleman said that, but he is quite wrong. I have said so before and I repeat it now. If he will take the trouble tomorrow, in the calmness of his chambers or in the quiet of the Library, to read through what he said tonight, he will see how utterly wrong he is. This matter was discussed in Committee at great length. I made my views clear in Committee and I have made them clear tonight. I repeat that the Opposition are not only making heavy weather of this but are trying to take every opportunity of attacking the Labour Government. I reject what they have said, and I hope that the clause will remain in the Bill.

Mr. Stephen Ross: I do not intend to keep the House for more than a couple of minutes. I merely wish to add my congratulations, as a very new Member, to the Father of the House for the courage which he has shown. I am sorry that


some of the signatories to the amendment were not present when he made his speech.
I am not a man of legal training, but I am sure that the hon. and learned Member for Hackney, North and Stoke Newington (Mr. Weitzman) knows very well that this matter concerns not only the Housing Finance Act 1972 but earlier events. It would be an insult to fellow councillors and to the electorate if the clause were allowed to remain. As I said in Committee, a councillor is supposed to be a member of an honourable calling. I think we should uphold that tradition in this Chamber.

Mr. Swain: Is the hon. Gentleman aware that the Young Liberals made a fairly substantial contribution to the Clay Cross Fighting Fund?

Mr. Ross: In fact, I attacked the Young Liberals only the other day. I do not have to agree with all their actions. If Labour Members read the Press they will know all about that. I have a very good Young Liberal organisation in my constituency which often disagrees entirely with the actions of some of its colleagues.
I ask the House to uphold its principles and to delete the clause.

Mr. John Watkinson: I have a few words to say on disqualification. Unfortunately, I was not present to hear the speech of the Father of the House. I apologise to my right hon. Friend for not being present.
It seems that there is the inevitability of logic in the position of my right hon. Friend the Secretary of State. If, under Clause 1, we are to remove the other 400 councillors from the risk of disqualification, it seems unfair that the Clay Cross councillors, who have had the disqualification imposed upon them, should continue to bear the brunt of disqualification. It would be unfair when others have had the threat removed from them. There is logic, fairness and justice in this position.
In new clause 1 tabled by the Opposition certain discretionary powers were given to the courts under which they could impose a disqualification accord-

ing to the circumstances of the case. Incorporated in the clause was a mitigating factor which could be used by councillors to explain to the court why the full severity of the disqualification should not be imposed upon them.
That touches on the speeches made by my hon. and learned Friend the Member for Hackney, North and Stoke Newington (Mr. Weitzman) in the Second Reading debate and in Committee, when he stressed the importance of introducing into our discussion an element of mitigation—a factor which is common to the courts of this land—under which those who are brought before the courts are enabled to plead circumstances which would enable the court to reduce the penalty imposed upon them. The Opposition tabled a new clause which included the opportunity for mitigation.
In the Bill my right hon. Friend the Secretary of State has employed the technique of mitigation which is open to the courts, but, more importantly, he has followed the logic of his own argument and has viewed the situation with the comparison it deserves, in that he has clearly stated that if the threat of punishment is to be removed from some, it is right and proper that the threat of further disqualification should be removed from others who have already had punishment imposed upon them, albeit that that punishment has not run for its full length.

Mr. Peter Rees: So far we have had three speeches in defence of Clause 4. The hon. Member for Gloucester, West (Mr. Watkinson) appears to suggest that, because some may be at risk, therefore all must go scot free. I would only say to him that those who are prospectively at risk always have open to them the possibility of going to the courts under Section 230 on the basis that they thought they acted reasonably. If they cannot substantiate a defence under that section, to my way of thinking they are as guilty as the Clay Cross councillors.
With reference to the speech by the hon. and learned Member for Hackney, North and Stoke Newington (Mr. Weitzman), there is a maxim that dog does not eat dog. We are both members of the same profession so, perhaps, it would have been charitable in me to have


passed over his speech in silence. However, I am provoked by his acting the rôle of Portia in the Merchant of Venice:
The quality of mercy is not strain'd,
It droppeth like the gentle"—
dew from Hackney. If those were the forensic talents which he employed on behalf of his clients in the courts, I would suspect—I hope wrongly—that their sentences were doubled rather than halved. I prefer the rather low key forensic performance of the Secretary of State.
The Secretary of State approaches this problem as the brisk, practical man of the world; he takes the attitude "it is a messy situation, let's clear it up and wipe the slate clean". He did not go quite as far as to suggest that the capability and the contribution of the Clay Cross councillors were so special and so outstanding that Derbyshire should not be denied their services for another three years, but that was the logic of his argument.
The person whom we miss from our debate is the right hon. and learned Gentleman the Attorney-General. I deplore very much that owing to the fact that he reached the climax of his speech on Second Reading at two minutes to 10 o'clock we were deprived of the enviable opportunity of hearing him draw a fine distinction between surcharge and disqualification, a piece of subtle casuistry which, I am sure, would have regaled the House. Although we may admire the Attorney-General's forensic qualities in this regard it is imperative that he should command our respect and confidence as legal adviser to the House.
Some Conservative Members sympathise with the Attorney-General's predicament. Why should he satisfy with his resignation debts contracted in an unguarded moment by the shopsoiled figure of the Leader of the House? When collective responsibility has been jettisoned by the Government is individual consistency any longer required? Since Ministers are no longer obliged to defend Government decisions are they obliged any longer to defend their own? I would have asked the Attorney-General—it may be that the Minister will answer this when he replies—what of those who have been disqualified in other spheres? What about company directors who have been disqualified under the Companies Act

because they have been held to be unfit to manage companies and other people's finances? What about bankrupts? What if the Clay Cross councillors should be bankrupted? Are we to expect another Act of Indemnity to permit them to serve Derbyshire once again in spite of that particular disability?

Mr. Skinner: Yes.

Mr. Rees: No doubt we shall hear from the hon. Member for Bolsover (Mr. Skinner), who has standards all his own, how he would deal with that particular matter.
I would ask the Secretary of State, what if a person who has been bankrupted traces his downfall to the industrial and fiscal policies of the Secretary of State's right hon. Friends, would he expect a Conservative Government to introduce an Act of Indemnity on their behalf?

Mr. Skinner: They have done.

Mr. Rees: I shall await with interest, when the hon. Member for Bolsover catches your eye, Mr. Deputy Speaker, to see if he will regale us with examples where that has been done. It is important since the case put by the Government is, in a sense, a plea in mitigation. Perhaps there has been too much legalism. However, since it has been put that way, it is important to ask whether the Clay Cross councillors acted in ignorance and whether they have shown any contrition. I listened with great interest to the speech deployed with such brazen eloquence by the hon. Member for Bolsover on Second Reading. At times he would have had us believe that they were acting in ignorance. If he does not recall it I shall be very happy to refer him to the passage in Hansard. On other occasions he would have had us believe that they were martyrs in a Socialist cause.

Mr. Skinner: No, not again.

Mr. Rees: Let us have it one way or the other. I would remind the hon. Gentleman that it was always open to the Clay Cross councillors in the proceedings of the Divisional Court to plead that they acted in reasonable ignorance of the law and that they had acted reasonably. It is interesting to note—and the House should recall this—that their counsel on that occasion was the hon. Member for York


(Mr. Lyon). No doubt, having carefully considered the facts and the law, he expressly abandoned any defence under Section 230. I hope that if the hon. Member for Boslover catches your eye, Mr. Deputy Speaker and I shall look forward very much indeed to his speech if he does—he will not employ that defence on this occasion, because it was a defence expressly rejected by the counsel of his brother and his friends.
9.30 p.m.
Therefore, one asks whether any contrition has been shown at any point of time by the Clay Cross councilors? What is the evidence? Their conduct has been as consistent as it has been brazen. I suggest to the Secretary of State that if he is really concerned with the standards of local government administration, which are his peculiar responsibility, he might be well advised to job back and look at the history of the Clay Cross Council. If he wants any prima facie evidence he ought to look at a remarkable piece of journalism by Mr. Austin Mitchell in the Political Quarterly, which has never been denied, as far as I know, from either side of the House.
What kind of advice did the Minister, in 1968, tender to Clay Cross Council? How did he react to the councillors' goings on then, years before the introduction of the Housing Finance Act. We cannot blame the Conservative Government for that. The councillors' conduct was plain under the previous Labour Government.

Mr. Skinner: They never broke the law.

Mr. Rees: I wonder. If I am asked to go into the Lobby to support this meretricious little Bill I want to know a great deal more of the conduct of affairs in Clay Cross than I have yet been told by any Minister.
What has happened to the case of Miss Owens and her litigation? What stage has it reached? Who will bear the cost? What about the discharge and re-engagement of the staff of the council in 1973? How has their position been safeguarded, and what is it now. What about the 33 per cent. pay increases to council workmen in 1973—above the norm imposed by the law at that time? I know that the hon. Member for Bol-

sover would have no truck with that law either. He is remarkably selective in what he will accept and in what he will not accept. We must obey the law, but he may pick and choose, and so, evidently, may his right hon. and hon. Friends.
What about the deficit in the housing revenue account? Will the Minister tell us who is picking up the cheque there? Will it be the new successor district council that picks up that cheque?
What about the district auditor's report? I know that the Secretary of State, shielding behind the sub judice rule—incorrectly adduced in this case, as I understand it—would say that it would be improper for him or the Minister who is to wind up the debate to comment at all about that matter. But what if the Clay Cross councillors should appeal that surcharge? What if they should be disqualified for a further five years? The Secretary of State would have us believe then that he will reconsider the Bill. However, as I read the clause he has no power to do so. We are being asked, therefore, to lift a disqualification that may be reimposed in a matter of months.
There are, of course, general principles that go far outside the county of Derbyshire. I await with interest any contribution to the debate from a Derbyshire Member on the Government side of the House. If we pass the Bill unamended we shall undermine the position of district auditors and undermine the standards of good administration. What we need is a full public inquiry into what has gone on. I do not believe that we should be asked to pass over in silence a long history of maladministration—I have to pick my words with particular care here—which culminated in this confrontation with the then Conservative Government.
I am prepared in a political context, and, of course, in a religious context, to admire martyrs. I remind the House that Councillor Bunting said
I am prepared to serve a prison sentence for my Socialist principles.
I remind right hon. and hon. Members on the Government side of the House that that is precisely what Lansbury did. However, I am not prepared to admire martyrs who expect to be snatched from the flames by their friends at the eleventh hour, or


to admire small-town bullies and Tammany Hall bosses.
This is a shabby, shoddy little Bill. The Government hope to slip it through, realising that there will be in Derbyshire ripples which they hope will die away. They hope that the slate can be wiped clean. That is the Secretary of State's phrase, not mine. Nothing will be wiped clean by this Bill, and, in particular, the stench of corruption will hang around the Secretary of State for the rest of his career. I am sad to see a person of his standing and his standards in such company, with legislation of this kind. I had always thought that in this House, though we pursue different political objectives, we share the same standards. That, evidently, is no longer true. I challenge hon. and right hon. Gentlemen opposite who are so ready to barrack from a sitting position but have not yet offered a coherent defence of the Clay Cross action to say whether they consider that the late Lord Attlee would have countenanced a Bill like this. The fact is that the rotten and perverted standards of the hon. Member for Bolsover and his confederates have prevailed at Westminster, and long after the details of this squalid little Bill are forgotten that will be remembered by the country.

Mr. Ted Leadbitter: I was not intending to speak until I became certain in my own mind that this Bill was being used for the wrong purposes and the wrong objectives by hon. Members opposite. What the hon. and learned Member for Dover and Deal (Mr. Rees) requires, judging by the kind of language he uses, is to have a torch shone into the recesses of his mind, showing him some kind of enlightenment which might help him to get rid of his prejudices. [Interruption.] The truth is a changing thing.
There were times when councillors, not so many decades ago, were vilified because they sought to oppose the House of Commons in trying to establish, justice, as they saw it, in their communities. Justice, as we feel it in this House at any particular moment, is not the monopoly of truth. It has to be measured against the considerations which motivate those who seek to deal with the legislation passed in this House.
One thing was irrefutably clear when the Housing Finance Act was passed. Not one Labour Member of Parliament agreed with it; therefore, one half of the elected Members of the House were totally opposed to its iniquitous provisions.
If hon. Members opposite want to question that, they will have to answer a simple question. Do they themselves believe ultimately and totally in the processes of democracy which bring us all here? Have we not the inalienable right to exercise our different points of view on issues of importance to the people we represent? That is a major principle. It is not pursued in any constructive measure by the kind of shabby language used by the hon. and learned Member for Dover and Deal, whose reputation in this House is well known. He has never got beyond the political gutter.
I am not prepared to put the case for my hon. Friend the Member for Bolsover (Mr. Skinner). There is an hon. Member in the House representing that part of the country who has the capacity to do it. Those who, because they do not agree with my hon. Friend, feel that the alternative is to vilify him only demean the House by doing so.
I come now to Clause 4, which is the clause which divides the House. But, for that reason, it should raise us to a standard of debate which will at least make for a better understanding of the situation.
In my quarter of a century of public life, I have come to learn that any Member of Parliament who holds indefinitely a fixed point of view on any public issue and is not prepared to change his mind with the change of events has not the kind of flexibility for which the democracy he represents calls.
I suggest that sufficient time has passed for lessons to have been learned in our arguments about the Housing Finance Act and for us to be able to say that people made mistakes. However, most of us agree that, once this House passes legislation, the law must be respected. Therefore, there must be the feeling that we should change our attitude towards people who thought that they were justified in attacking it. The process of time justifies that consideration.
In Bolsover and in many other parts of the country there was a genuine belief that there had to be active opposition to what was considered to be an iniquitous piece of legislation. There were others who recognised the iniquity of it but felt that they must comply with it.
I ask right hon. and hon. Members to consider where our great reformers would be if we did not respect those who take a more militant view. It is our job in this House to maintain what might be called a continuous review of a developing situation. Therefore, I agree with my right hon. Friend the Secretary of State that putting Clause 4 into the Bill does not make a cheap and shabby Bill. The inclusion of Clause 4 means that the Bill is saying that the argument has gone on sufficiently long for all reasonable men to decide that it is time to bring the situation to an end and to settle it.
Let the House divide. Let the Opposition divide how they will. But do not let them presume that they are sanctified with all that is right because they wish to exercise their votes in a particular way. Ultimately, the House must accept that there are those among its Members who believe that there is another way to divide. I intend to go into the Lobby and to vote not purely on the basis of the conduct of individuals and not judging them as individuals but because I believe that, for the nation as a whole and for all those involved, the time scale is such that we should bring the matter to a suitable end [Hon. MEMBERS: "Hear, hear."] It is apparent from those cries of "Hear, hear" that I shall be voting in one Lobby and that Opposition Members will be voting in the other. There is no doubt that when the votes are counted some hon. Members will be highly satisfied with their day's work while others will not.
When I came to the House the level of debate was such that the lowest form of language was used for the worst possible motives and that brought no credit to this honourable place.
I am satisfied that there is good reason for the Bill, which has been brought forward in a moderate manner by my right hon. Friend. I support the Bill that he has put before the House.

9.45 p.m.

Mr. Raison: The hon. Member for Hartlepool (Mr. Leadbitter) said that he

was trying to bring this matter to an end. I shall make a short contribution directed to the same objective. It is time that we moved towards a vote.
The essence of the arguments that we heard in our more serious moments in the last debate has been why would the Clay Cross councillors be relieved of disqualification? Ostensibly, at least, it has had nothing to do with the question of financial penalties. The only serious argument put forward for Clause 4 was by the Secretary of State, who said that it would be unfair on the Clay Cross councillors to be disqualified for five years when other councillors in the other parts of the country which defied the Housing Finance Act were to be disqualified for no period at all. As I understood it, that was the whole essence of the Secretary of State's argument.
First, I must reiterate that we reject the view that the other councillors should not be liable to any disqualification or surcharge. It was the essence of our new Clause 1 that they should be so liable. Even if they are relieved as the Bill proposes, we still see no reason why the Clay Cross councillors should be relieved, for, in the now famous, or perhaps notorious, words of the Leader of the House at the Labour Party Conference in 1973,
Clay Cross is something rather special. It really is".
Our reasons for believing that the special nature of what happened at Clay Cross demands different treatment and that the penalty of disqualification which was imposed should now be upheld are as follows. First, the House is now familiar with the events that happened at Clay Cross before the Housing Finance Act was ever brought forward as a Bill. I am sure that many hon. Members by now have read the article in The Political Quarterly last year by Austin Mitchell, which set out the record of the Clay Cross councillors in that period.
Secondly, events since the Act which have led to this latest surcharge add further justification. The story of the latest surcharge, told in the report of the district auditor, is astonishing. When the Secretary of State referred to the latest surcharge he was tacitly admitting that it is relevant to consider these matters when coming to a conclusion about Clause 4.
The hon. Member for Gloucestershire, West (Mr. Watkinson) complained about our approach, saying that it was irrelevant to talk about these events. More particularly, he said that we were putting forward a scheme which would lead to a possible mitigation of penalties and surcharges. I reply that we were doing so in the context that it was the courts that would decide. Does he seriously believe that the courts, faced with the Clay Cross councillors, would decide to reduce the penalty of disqualification? In my view, it is completely incredible that they would.
Thirdly, there is the verdict of Lord Denning, which in my view is one of the most damning verdicts that it would be possible to imagine. It may well be that the latest surcharge and disqualification will mean that Clause 4 is ultimately redundant.
I must admit that there are moments when it appears that farce is creeping in to the whole of this matter. It is not fundamentally for that reason that we believe that Clause 4 should be deleted. We believe that it should be deleted because it carries mercy to a point where a mockery is made of justice. It condones deliberate law breaking in a way which sets an appalling precedent.
When will the £7,000 fund which the Labour Party was to set up to pay the surcharge on the Clay Cross Councillors be paid off? What is happening about that fund? The Under-Secretary said in Committee, on how that surcharge was being pursued by the district auditor, that
He has obtained a judgment on that and a writ was served on 11th June last year. It is for the district auditor to decide how and when to pursue the councillors in relation to that surcharge."—[Official Report, Standing Committee D, 24th April 1975; c. 279.]
No doubt it is. I do not quarrel with that point of view. But it is astonishing that after that period the money has not been paid in. After all, the Prime Minister himself indicated, in his statement on 4th April 1974, that the Labour Party was to consider how to raise the money. Well over a year later, as far as I know it has not been paid. What has happened? Are Labour Members willing to vote for the Bill but not to fork out to meet its implications?
In speaking on the clause, the Secretary of State carried no conviction. Perhaps he was put off his stroke by his hon. Friends below the Gangway. He ignored the major difference between our approach and that of the Government on the possibility of reducing the period of disqualification. Our approach is based on the view that it is far better for the courts to make these decisions. His approach is political. He is relying on the votes of his hon. Friends below the Gangway to get Clause 4 through. He is welcome to them. But I hope that those hon. Members in the Labour Party with a sense of honour who have spoken tonight will stick to their guns and vote to delete this disgraceful clause.

Mr. Crosland: With the leave of the House, perhaps I may make a few remarks in reply to the points raised in the debate.
My hon. Friend the Member for Derbyshire, North-East (Mr. Swain) raised the question of Section 229. His interpretation of the section is correct, but the surcharges are joint and several. Of the last £52,000-odd, there is no item under £500 in Clay Cross. In any case, the amounts surcharged are not divided by the number of persons.
The hon. and learned Member for Southport (Mr. Percival) and the hon. Member for Aylesbury (Mr. Raison) mentioned the fund. I must make it absolutely clear that raising the money is not a matter for the Government. I understand that steps are being taken to raise it, but that the £7,000 has not yet been paid. How it is raised is not a matter for me or my ministerial colleagues. I understand that it is likely to be available fairly soon, but I am not in a position to give the House precise information, because the fund is entirely a private matter.
I am sorry to say that the hon. and learned Member for Southport returned to the matter of the advice that my right hon. and learned Friend the Attorney-General is known to have given—indeed, it was public—to the Labour Party at an earlier stage in this discussion. Although he accepted, of course, the difference between the two questions, one relating to disqualification and the other to retrospective removal of financial penalties, he said that if my right hon. and learned Friend had been asked both


questions and not just one he would have given the same answer to both.
My right hon. and learned Friend explained with great care and at great length in Committee that that is not the case. When asked about the retrospective removal of financial penalties, he was able to say correctly that as far as he knew there were no precedents for it. He pointed out again and again in Committee that if he had been asked about disqualification he could not possibly have given that answer. We know from the hours of discussion in Committee that there were many precedents. They were argued about, and they were interpreted differently.
I wish to make three crucial points. The first concerns the importance of being consistent and fair as regards the disqualification of councillors who fail to implement the law. This Bill will relieve --and the Opposition proposals would partially relieve—those who defied the law but have not been surcharged. But the Opposition attitude would be not to relieve from disqualification those at Clay Cross who defied the law but who were surcharged.
I feel strongly about that matter. In that regard I found the anecdotes of the hon. and learned Member for Dover and Deal (Mr. Rees) about Lord Attlee and George Lansbury not instantly appealing. However, I agreed with him on this point. He said that the other 400 councillors who did not implement the Act and who, if they were surcharged, appealed against the surcharge and had the appeal turned down, should be treated in exactly the same way as the Clay Cross councillors. I make precisely that point. I ask for parity and equity of treatment between all those who failed to implement the Act, whether the surcharge had been made—as it was in the case of Clay Cross—or whether it had not been made, as was the case in all the other places.
Secondly, I remind the House, and some of my hon. Friends, why there was a difference between Clay Cross, where a surcharge was imposed, and the other councils, where a surcharge was not imposed. The reason was that in the case of Clay Cross alone the right hon. Member for Brighton, Pavilion (Mr. Amery) decided on an extraordinary audit. He decided that such an audit should take

place in Clay Cross but in no other place. That is the only reason why Clay Cross is not on all fours with the 20 or so other councils which failed for some considerable time to implement the Act. It is not that it behaved worse: there are different opinions as to that. What is not a matter of opinion is that it was singled out for an extraordinary audit. That alone explains why a surcharge was made in that one council area, and in no other.

Mr. Skinner: My right hon. Friend correct when he refers to the Secretary of State for the Environment sending in the auditors to make an extraordinary audit. However, is he aware that, while I agree with him on that question, the logic which he pursues is almost bound to lead him to the conclusion which I share—namely, that if the Clay Cross councillors were no different from any of the other 400 councillors, the removal of the surcharge of £7,000 should also take place?

Mr. Crosland: I have come to my conclusion on that matter. I do not propose to alter it.
I now address my right hon. Friend the Member for Vauxhall (Mr. Strauss). He said that we were not talking about a major penalty and that we were talking about the difference between two years and five years. I go along with him on that point, although I draw a different conclusion. All that Lord Denning, who made those rough remarks about the Clay Cross councillors, could do was to endorse a five-year disqualification. That was the limit of Lord Denning's powers. He could not disqualify them for life. He disqualified them for five years, which was the maximum possible period. I agree that the difference between two years and five years is not crucial. In my opinion, it is not crucial enough to permit us to draw this fundamental and basic distinction between the Clay Cross non-implementers and other non-implementers.
On Second Reading the Attorney-General was subjected to personal attacks which came close to character assassination. The hon. and learned Member for Wimbledon (Sir M. Havers), who I regret to see, is not here, used his authority as a former Law Officer in a way which was calculated to undermine the relationship between my right hon. and learned


Friend and his colleagues in the legal profession.
In Committee my right hon. and learned Friend had the opportunity, which was denied to him on Second Reading, to make his case and answer the charges made against him in an atmosphere of comparative calm. He made his case moderately and persuasively and, to their credit—

It being Ten o'clock, the debate stood adjourned.

Ordered,
That the Housing Finance (Special Provisions) Bill may be proceeded with at this day's Sitting, though opposed, until any hour.—[Mr. John Ellis.]

Question again proposed, That the amendment be made

Mr. Crosland: My right hon. and learned Friend made his case moderately and persuasively and, to their credit, hon.

and learned Gentlemen opposite dissociated themselves from the attack on his character, whilst maintaining their criticism of his judgment.

Today, in my view, my right hon. and learned Friend has made an unanswerable case. The time has now come for the hon. and learned Member for Wimbledon to follow his hon. and learned Friends and to have the courage and decency to be expected of a former Law Officer to withdraw the wounding and unjustified personal attack which he saw fit to launch against my right hon. and learned Friend. I hope that before the debate concludes he will find time to do so.

We have argued the matter at length. I will not argue it any more. I ask the House to reject the amendment.

Question put, That the amendment be made:—

The House divided: Ayes 242, Noes 250.

Division No. 206.]
AYES
[10.1 p.m.


Adley, Robert
Douglas-Hamilton, Lord James
Havers, Sir Michael


Aitken, Jonathan
Drayson, Burnaby
Hayhoe, Barney


Alison, Michael
du Cann, Rt. Hon. Edward
Heseltine, Michael


Amery, Rt. Hon. Julian
Durant, Tony
Hicks, Robert


Arnold, Tom
Eden, Rt. Hon. Sir John
Higgins, Terence L.


Atkins, Rt. Hon. H. (Spelthorne)
Edwards, Nicholas (Pembroke)
Holland, Philip


Awdry, Daniel
Elliott, Sir William
Howe, Rt. Hon. Sir Geoffrey


Banks, Robert
Emery, Peter
Howell, David (Guildford)


Beith, A. J.
Eyre, Reginald
Howells, Geraint (Cardigan)


Bell, Ronald
Fairbairn, Nicholas
Hunt, John


Bennett, Sir Frederic (Torbay)
Fairgrieve, Russell
Hurd, Douglas


Berry, Hon. Anthony
Fell, Anthony
Hutchison, Michael Clark


Biffen, John
Finsberg, Geoffrey
Irvine, Bryant Godman (Rye)


Biggs-Davison, John
Fletcher, Alex (Edinburgh N.)
Irving, Charles (Cheltenham)


Body, Richard
Fookes, Miss Janet
James, David


Boscawen, Hon. Robert
Fox, Marcus
Jenkin, Rt. Hon. P. (Wanst'd &amp; W'df'd)


Bowden, A. (Brighton, Kemptown)
Fraser, Rt. Hon. H. (Stafford &amp; St)
Jessel, Toby


Boyson, Dr. Rhodes (Brent)
Freud, Clement
Johnson Smith, G. (E. Grinstead)


Braine, Sir Bernard
Fry, Peter
Johnston, Russell (Inverness)


Brittan, Leon
Galbraith, Hon. T. G. D.
Jones, Arthur (Daventry)


Brotherton, Michael
Gardner, Edward (S Fylde)
Jopling, Michael


Brown, Sir Edward (Bath)
Gilmour, Rt. Hon. Ian (Chesham)
Joseph, Rt. Hon. Sir Keith


Bryan, Sir Paul
Gilmour, Sir John (East Fife)
Kaberry, Sir Donald


Buck, Antony
Glyn, Dr. Alan
Kellett-Bowman, Mrs. Elaine


Budgen, Nick
Godber, Rt. Hon. Joseph
Kershaw, Anthony


Bulmer, Esmond
Goodhart, Philip
Kilfedder, James


Burden, F. A.
Goodhew, Victor
King, Evelyn (South Dorset)


Carlisle, Mark
Goodlad, Alastair
King, Tom (Bridgwater)


Carr, Rt. Hon. Robert
Gorst, John
Kitson, Sir Timothy


Chalker, Mrs. Lynda
Gow, Ian (Eastbourne)
Knight, Mrs. Jill


Channon, Paul
Gower, Sir Raymond (Barry)
Knox, David


Churchill, W. S.
Grant, Anthony (Harrow C.)
Lane, David


Clark, Alan (Plymouth, Sutton)
Gray, Hamish
Langford-Holt, Sir John


Clarke, Kenneth (Rushcliffe)
Griffiths, Eldon
Latham, Michael (Melton)


Clegg, Walter
Grimond, Rt. Hon. J.
Lawrence, Ivan


Cockcroft, John
Grist, Ian
Lawson, Nigel


Cooke, Robert (Bristol W.)
Grylls, Michael
Le Merchant, Spencer


Cope, John
Hall, Sir John
Lester, Jim (Beeston)


Cordle, John H.
Hall-Davis, A. G. F.
Lewis, Kenneth (Rutland)


Cormack, Patrick
Hamilton, Michael (Salisbury)
Lloyd, Ian


Costain, A. P.
Hampson, Dr. Keith
Loveridge, John


Critchley, Julian
Hannam, John
Luce, Richard


Crouch, David
Harrison, Col. Sir Harwood (Eye)
McAdden, Sir Stephen


Crowder, F. P.
Harvie Anderson, Rt. Hon. Miss
McCrindle, Robert


Dodsworth, Geoffrey
Hastings, Stephen
Macfarlane, Neil




MacGregor, John
Penhaligon, David
Stainton, Keith


Macmillan, Rt. Hon. M. (Farnham)
Percival, Ian
Stanbrook, Ivor


McNair-Wilson, M. (Newbury)
Peyton, Rt. Hon. John
Stanley, John


McNair-Wilson, P. (New Forest)
Pink, R. Bonner
Steen, Anthony (Wavertree)


Madel, David
Prior, Rt. Hon. James
Stewart, Ian (Hitchin)


Marshall, Michael (Arundel)
Raison, Timothy
Stokes, John


Mates, Michael
Rathbone, Tim
Stradling Thomas J.


Mather, Carol
Rees, Peter (Dover &amp; Deal)
Tapsell, Peter


Maude, Angus
Rees-Davies, W. R.
Taylor, R. (Croydon NW)


Maudling, Rt. Hon. Reginald
Renton, Rt. Hon. Sir D. (Hunts)
Taylor, Teddy (Cathcart)


Maxwell-Hyslop, Robin
Renton, Tim (Mid-Sussex)
Tebbit, Norman


Mayhew, Patrick
Ridley, Hon. Nicholas
Temple-Morris, Peter


Miller, Hal (Bromsgrove)
Ridsdale, Julian
Thatcher, Rt. Hon. Margaret


Miscampbell, Norman
Rifkind, Malcolm
Thomas, Rt. Hon. P. (Hendon S.)


Moate, Roger
Roberts, Wyn (Conway)
Thorpe, Rt. Hon. Jeremy (N Devon)


Monro, Hector
Rodgers, Sir John (Sevenoaks)
Townsend, Cyril D.


Montgomery, Fergus
Ross, Stephen (Isle of Wight)
Trotter, Neville


Moore, John (Croydon C.)
Rossi, Hugh (Hornsey)
Tugendhat, Christopher


More, Jasper (Ludlow)
Royle, Sir Anthony
van Straubenzee, W. R.


Morgan, Geraint
Sainsbury, Tim
Vaughan, Dr. Gerard


Morgan-Giles, Rear-Admiral
St. John-Stevas, Norman
Viggers, Peter


Morris, Michael (Northampton S.)
Scott, Nicholas
Wainwright, Richard (Colne V.)


Morrison, Charles (Devizes)
Shaw, Giles (Pudsey)
Wakeham, John


Morrison, Hon. Peter (Chester)
Shaw, Michael (Scarborough)
Walker, Rt. Hon. P. (Worcester)


Mudd, David
Shelton, William (Streatham)
Wall, Patrick


Neave, Airey
Shepherd, Colin
Walters, Dennis


Nelson, Anthony
Shersby, Michael
Warren, Kenneth


Neubert, Michael
Silvester, Fred
Weatherill, Bernard


Newton, Tony
Sims, Roger
Wells, John


Nott, John
Sinclair, Sir George
Whitelaw, Rt. Hon. Willian


Onslow, Cranley
Skeet, T. H. H.
Wiggin, Jerry


Oppenheim, Mrs. Sally
Smith, Cyril (Rochdale)
Winterton, Nicholas


Osborn, John
Smith, Dudley (Warwick)
Young, Sir G. (Ealing, Acton)


Page, John (Harrow West)
Speed, Keith



Page, Rt. Hon. R. Graham (Crosby)
Spence, John
TELLERS FOR THE AYES:


Pardoe, John
Spicer, Michael (S Worcester)
Mr. W. Benyon and


Parkinson, Cecil
Sproat, Iain
Mr. Adam Butler.


Pattie, Geoffrey






NOES


Armstrong, Ernest
Davies, Bryan (Enfield N.)
Hamilton, James (Bothwell)


Ashley, Jack
Davies, Denzil (Llanelli)
Hardy, Peter


Ashton, Joe
Davies, Ifor (Gower)
Harper, Joseph


Atkins, Ronald (Preston N.)
Davis, Clinton (Hackney C.)
Harrison, Walter (Wakefield)


Bagier, Gordon A. T.
Deakins, Eric
Hart, Rt. Hon. Judith


Barnett, Guy (Greenwich)
Dean, Joseph (Leeds West)
Hattersley, Rt. Hon. Roy


Barnett, Rt. Hon. Joel (Heywood)
de Freitas, Rt. Hon. Sir Geoffrey
Hatton, Frank


Bates, Alf
Delargy, Hugh
Hayman, Mrs. Helene


Bean, R. E.
Dell, Rt. Hon. Edmund
Healey, Rt. Hon. Denis


Bennett, Andrew (Stockport N.)
Doig, Peter
Heffer, Eric S.


Bidwell, Sydney
Dormand, J. D.
Hooley, Frank


Bishop, E. S.
Douglas-Mann, Bruce
Horam, John


Blenkinsop, Arthur
Duffy, A. E. P.
Howell, Denis (B'ham, Sm H.)


Booth, Albert
Dunnett, Jack
Hoyle, Doug (Nelson)


Bottomley, Rt. Hon. Arthur
Dunwoody, Mrs. Gwyneth
Hughes, Rt. Hon. C. (Anglesey)


Bray, Dr. Jeremy
Eadie, Alex
Hughes, Mark (Durham)


Brown, Hugh D. (Provan)
Edelman, Maurice
Hughes, Robert (Aberdeen N.)


Brown, Robert C. (Newcastle W.)
Edge, Geoff
Hughes, Roy (Newport)


Buchanan, Richard
Edwards, Robert (Wolv SE)
Hunter, Adam


Butler, Mrs. Joyce (Wood Green)
English, Michael
Jackson, Colin (Brighouse)


Callaghan, Rt. Hon. J. (Cardiff SE)
Ennals, David
Jackson, Miss Margaret (Lincoln)


Callaghan, Jim (Middleton &amp; P.)
Evans, Gwynfor (Carmarthen)
Janner, Greville


Campbell, Ian
Evans, Ioan (Aberdare)
Jay, Rt. Hon. Douglas


Canavan, Dennis
Evans, John (Newton)
Jeger, Mrs. Lena


Cant, R. B.
Ewing, Harry (Stirling)
Jenkins, Hugh (Putney)


Carter, Ray
Fitt, Gerard (Belfast W.)
John, Brynmor


Carter-Jones, Lewis
Flannery, Martin
Jones, Alec (Rhondda)


Cartwright, John
Fletcher, Raymond (Ilkeston)
Jones, Barry (East Flint)


Castle, Rt. Hon. Barbara
Fletcher, Ted (Darlington)
Jones, Dan (Burnley)


Ciemitson, Ivor
Foot, Rt. Hon. Michael
Kaufman, Gerald


Cocks, Michael (Bristol S.)
Forrester, John
Kerr, Russell


Coleman, Donald
Fowler, Gerald (The Wrekin)
Kilroy-Silk, Robert


Concannon, J. D.
Fraser, John (Lambeth, N'w'd)
Lambie, David


Conlan, Bernard
Freeson, Reginald
Lamborn, Harry


Cook, Robin F. (Edin C.)
Garrett, John (Norwich S.)
Lamond, James


Corbett, Robin
Garrett, W. E. (Wallsend)
Loadbitter, Ted


Cox, Thomas (Tooting)
George, Bruce
Lee, John


Craigen, J. M. (Maryhill)
Ginsburg, David
Lever, Rt. Hon. Harold


Crosland, Rt. Hon. Anthony
Golding, John
Litterick, Tom


Cryer, Bob
Gould, Bryan
Lomas, Kenneth


Cunningham, G. (Islington S.)
Gourlay, Harry
Lyon, Alexander (York)


Cunningham, Dr. J. (Whiteh)
Graham, Ted
McElhone, Frank


Dalyell, Tam
Grant, John (Islington C.)
MacFarquhar, Roderick


Davidson, Arthur
Grocott, Bruce
Mackenzie, Gregor







Maclennan, Robert
Prescott, John
Taylor, Mrs. Ann (Bolton W.)


McMillan, Tom (Glasgow C.)
Price, C. (Lewisham W.)
Thomas, Jeffrey (Abertiltery)


McNamara, Kevin
Price, William (Rugby)
Thomas, Mike (Newcastle E.)


Madden, Max
Radice, Giles
Thomas, Ron (Bristol NW)


Mahon, Simon
Rees, Rt. Hon. Merlyn (Leeds S.)
Thorne, Stan (Preston South)


Mallalieu, J. P. W.
Richardson, Miss Jo
Tierney, Sydney


Marks, Kenneth
Roberts, Albert (Normanton)
Tinn, James


Marquand, David
Roberts, Gwilym (Cannock)
Tomlinson, John


Marshall, Dr. Edmund (Goole)
Robertson, John (Paisley)
Tomney, Frank


Marshall, Jim (Leicester S.)
Roderick, Caerwyn
Urwin, T. W.


Mason, Rt. Hon. Roy
Rodgers, George (Chorley)
Wainwright, Edwin (Dearne V.)


Maynard, Miss Joan
Rodgers, William (Stockton)
Walden, Brian (B'ham, L'dyw'd)


Moocher, Michael
Rooker, J. W.
Walker, Harold (Doncaster)


Mellish, Rt. Hon. Robert
Roper, John
Walker, Terry (Kingswood)


Mendelson, John
Rose, Paul B.
Ward, Michael


Millan, Bruce
Ross, Rt. Hon. W. (Kilmarnock)
Watkins, David


Mitchell, R. C. (Soton, Itchen)
Rowlands, Ted
Watkinson, John


Molloy, William
Ryman, John
Weetch, Ken


Morris, Alfred (Wythenshawe)
Sandelson, Neville
Weitzman, David


Morris, Charles R. (Openshaw)
Sedgemore, Brian
Wellbeloved, James


Morris, Rt. Hon. J. (Aberavon)
Selby, Harry
White, Frank R. (Bury)


Moyle, Roland
Shaw, Arnold (Ilford South)
White, James (Pollok)


Mulley, Rt. Hon. Frederick
Sheldon, Robert (Ashton-u-Lyrae)
Whitehead, Phillip


Murray, Rt. Hon. Ronald King
Short, Rt. Hon. E. (Newcastle C.)
Whitlock, William


Newens, Stanley
Short, Mrs. Renée (Wolv NE)
Willey, Rt. Hon. Frederick


Noble, Mike
Silkin, Rt. Hon. John (Deptford)
Williams, Alan (Swansea W.)


Oakes, Gordon
Silkin, Rt. Hon. S. C. (Dulwich)
Williams, Alan Lee (Hornch'ch)


O'Halloran, Michael
Sillars, James
Williams, W. T. (Warrington)


O'Malley, Rt. Hon. Brian
Silverman, Julius
Wilson, Alexander (Hamilton)


Orbach, Maurice
Skinner, Dennis
Wilson, Rt. Hon. H. (Huyton)


Ovenden, John
Small, William
Wilson, William (Coventry SE)


Owen, Dr. David
Smith, John (N Lanarkshire)
Wise, Mrs. Audrey


Palmer, Arthur
Snape, Peter
Woodall, Alec


Park, George
Spearing, Nigel
Woof, Robert


Parker, John
Stallard, A. W.
Wrigglesworth, Ian


Parry, Robert
Stewart, Rt. Hon. M. (Fulham)
Young, David (Bolton E.)


Pearl, Rt. Hon. Fred
Stoddart, David



Pendry, Tom
Stott, Roger
TELLERS FOR THE NOES:


Perry, Ernest
Strang, Gavin
Mr. James A. Dunn and


Phipps, Dr. Colin
Summerskill, Hon. Dr. Shirley
Mr. John Ellis.


Prentice, Rt. Hon. Reg
Swain, Thomas

Question accordingly negatived.

10.15 p.m.

Mr. Crosland: I beg to move, That the Bill be now read the Third time.
The House has given this comparatively short Bill full consideration both in Committee and again today. The Opposition, and certain of my hon. Friends on some aspects, have expressed themselves most forcibly in their dislike of the Bill and have been critical of the Government. [Interruption.] We cannot complain about that. It is right that these matters should be fully debated. In view of the Bill's origins—[Interruption]—it is hardly a matter for surprise that the Opposition should take a different view from the Government on the way in which this whole matter should be cleared up. [Interruption.]

Mr. Speaker: Order. These conversations must take place outside the Chamber.

Mr. Crosland: The differences between the two sides of the House are not as great as might be suggested by some of the robust language that has been used, especially on Second Reading. There is, in particular, agreement on the following points. First, whatever Government were in power they would have had to legislate. Conservative Members do not wish to apply the full rigour of the existing law, and their amendments and the new clauses outlined the legislation which they would have introduced. There is agreement on the fact that something had to be done and that we had to find a commonsense answer to an exceptional situation.
Second, there is also agreement that whatever was to be done should temper justice with mercy, a phrase used by the hon. Member for Aylesbury (Mr. Raison) earlier today. Tory Members have reiterated that they have no desire to be vindictive. Third, it follows that there is also agreement in saying that we should not exact the full surcharge and disqualification penalties set out in the existing law. In new Clause 1 the Opposition were proposing a limit, at the discretion of the courts, to the amount of the surcharge and to the period of disqualification.
There is agreement that in certain cases—we disagree about who should have the

discretion—the penalties should be less than those under existing law. There would have to be legislation to that effect. The agreement goes even further than that, because there is some agreement with part of our method of dealing with the problem. The hon. Member for Aylesbury and his colleagues have accepted the rent loss certificate and have accepted that the rent loss should fall on the local community.
Despite that, there have been major disagreements. These have come out today, notably in the discussion on Amendment No. 5 and Clause 4. These are extremely serious matters, particularly that dealing with Clause 4.
Let me say a word about the precedents as this subject occupied a high proportion of the discussion in Committee. I entirely agree with the hon. Member for Aylesbury who said earlier today that the existence of precedents cannot possibly be the whole or sole justification for such a Bill. Nevertheless, I, and, I imagine, my colleagues, would be extremely disturbed if we were unable to find any precedents at all. I agree, although many Members of the Opposition do not, with the Attorney-General that Mr. Neville Chamberlain's actions in 1927 were strikingly close precedents. I still continue to believe that the action of the then Conservative Secretary of State with regard to school milk at Merthyr Tydfil is certainly not without relevance to our discussion.
I repeat the more general point I made on Second Reading, which is that throughout history Governments have faced situations in which they have had to balance one social value—namely, clemency and a willingness to forgive—against another social value, the rule of law. I have an extremely long article from the American Law Journal setting out hundreds of such cases of amnesty, partial amnesty and indemnity. A high proportion came after the end of a war and are akin to the kind of problems President Ford is facing with the draft evaders and the Vietnam deserters.
Nevertheless a considerable number of these cases also occurred in peace time. I was reminded only yesterday of a famous American case, the American Whiskey Rebellion. I am sure that hon. Members will recall that Alexander


Hamilton imposed an excise duty on whisky for the first time. This was not merely opposed but totally defied by practically every farmer in Pennsylvania. That culminated in the so-called Whiskey Rebellion of 1794. In 1795, in the famous speech which set up the classic case for an amnesty. Congress was persuaded to grant a pardon in certain circumstances.
The only alternative to the Bill, which is the Conservative proposal, is summarised in the new clause that we considered today. That alternative would itself be an act of clemency. New Clause 1 amounts to a partial amnesty as it alters the law to prevent the full rigour of the existing law being visited on a large number of councillors who defied the law. The Conservative alternative would be in the same danger of being quoted in future cases as our Bill will be according to the hon. Member for Aylesbury.
I still believe that the Bill is the only effective way in which, to quote the now continuously quoted words of Mr. Neville Chamberlain. "we can wipe the slate clean". I think we should do so now.

10.22 p.m.

Mr. Raison: The Bill came to the House as a disgrace, and if it receives a Third Reading it will leave the House as a disgrace. I must say straight away to the Secretary of State that the gap between us is far wider than he set out to suggest. There is a deep gap in terms of principle. The emollient words that we have heard from time to time from the Secretary of State and from the Parliamentary Secretary to the Law Officers' Department about recognising that the Bill is not perfect have turned out to mean virtually nothing. As it stands, the Bill can give succour only to those who think that the rule of law does not matter.
During the course of the proceedings we have offered a series of constructive amendments which could have had the effect only of making the Bill far more acceptable to the people's sense of justice. All our amendments that were of any significance have been spurned, and I believe wrongly spurned. We set out a scheme by which the decision as to each case could have been examined by

the courts and the appropriate financial penalties and disqualifications decided. In our view, that approach had great advantages in terms of justice and common sense.
It seems that the Government's approach throughout this business has been bedevilled by the fact that they are acting in advance of knowledge of the facts. I put to the Government the point that we have repeatedly made which they have never sought to answer throughout our debates—namely, that the Prime Minister said in April last year:
Only when we see the full extent and magnitude of the problem will it be possible for us"—
that is the Government—
to make our recommendations to the House …".—[Official Report, 4th April, 1975, Vol. 871, c. 1445.]
They have never answered that point. The truth is that in this legislation Parliament does not know what it is doing. We do not know the full extent of the problem. On one of the few occasions when we acquired facts—namely, the cost of repayments—it was shown quite clearly that the provisions in the Bill for the five-year period of repayment were frankly absurd. The Government must know perfectly well that those provisions are absurd, yet they persisted in leaving them in the Bill. There is no case for the Bill in its present form.
I wish to take up the point made by the Secretary of State. The fact that the Government have rested their arguments almost entirely on the precedents unquestionably weakens the ability of future Governments to resist any future lawbreaking by councillors, and it inevitably weakens the ability of Ministers to perform their functions. What can the Attorney-General say to councillors who in future refuse to implement one of his Government's measures? They would quote to him the precedents which he has quoted to us again and again. He would have no answer. If the councillors said "Will you kindly wipe the slate clean?" what could he say? They would be entitled to point out that this continuous emphasis on precedents means that the Government are in no position to resist any councillors who from now on decide to take the course followed by the councillors of Clay Cross and elsewhere.
The Bill is a deep affront to the sense of justice of all sorts of people in all sorts of parties throughout the land. There is a deep affront to the sense of justice of council tenants in areas which in no sense belonged to the community which benefited. These people are being put in the position of being liable to pay for the failure of councillors—who were not elected by them—to collect rents in an area in which they have no part. The arguments we heard from the Government Front Bench on the amendment were the feeblest I have ever heard.
The same applies to ratepayers outside the relevant areas. Why should they be forced to pay for the delinquency of these councillors? There is also deep affront to our sense of the notion of law in the way in which the relief of disqualification put forward by the Government flies in fiat contradiction to the whole tenor of Lord Denning's solemn judgment.
The Bill lets off completely those who defied the law and places a heavy burden on those who did not. It stains irreparably the reputation of those who bring it forward and, worst of all, it leaves another tremor in the hearts of those who care for the sovereignty of Parliament and the rule of law. I urge the House to reject the Bill.

10.27 p.m.

Mr. Lawrence: I have been struck by the shabbiness of the arguments which have been advanced by otherwise intelligent men in support of this despicable measure.
Few things more shabby have occurred during the passage of the Bill than the nasty little attack which the Secretary of State has just perpetrated upon my hon. and learned Friend the Member for Wimbledon (Sir M. Havers) behind his back and without giving him the courtesy of notice. [HON. MEMBERS: "Where is he?".] I remind the House of what my hon. and learned Friend said in the Second Reading debate:
My duty to criticise the Attorney-General tonight gives me no pleasure, but my duty is clear both as an ex-Law Officer and as a lawyer dedicated to the maintenance of the rule of law and of Parliament. I must ask the Attorney-General how he can justify this not only to the House but to his colleagues in the Temple where he is the Leader of the Bar. How can he justify it to the Director of Public Prosecutions and his staff for whom he has ministerial responsibility? How can he

justify it to the police who so frequently seek his advice? How can he justify it to the country which is entitled to believe that Law Officers of the Crown are fair and impartial and fiercely proud of their independence? … This is the most serious threat to our constitution. Those charged with enforcing the law, not only the police but those in local government and those charged by Parliament to administer laws which are unpopular to some sections of the community, will wait with the deepest anxiety on what we do tonight.

Mr. Deputy Speaker (Mr. Oscar Murton): Order. The hon. Gentleman must not recapitulate at great length what has already appeared in the Official Report.

Mr. Lawrence: I am concluding, Mr. Deputy Speaker. In your absence a great deal of leeway was given to Government supporters who talked of all sorts of irrelevant matters.
My hon. and learned Friend concluded by saying:
If the House gives the Bill a Second Reading, today will be a watershed in our history, a day which future historians will mark, a day which Law Officers of the Crown will remember with cringing shame."—[Official Report, 24th March 1975; Vol. 889, c. 153.]
The Opposition stand by everything that my hon. and learned Friend said.
The House will know the old adage that if one has a bad case one attacks the other side's attorney. The action of the Secretary of State is a condemnation of the pitiful Bill which he has brought before the House.
I want to deal with one utterance that was made earlier this evening when most of the Labour supporters who are now here were not present. The Secretary of State said that there was no clean solution to this problem. He was apologising for the Bill. But he was wrong. There is a clean solution. What is more, there is a clean and just solution.
The Labour Party's representatives in Clay Cross deliberately, wilfully and with knowledge of the consequences broke the law. The Labour Party, represented in the National Executive Council, commended those representatives for the stand which they took and voted to let them off the consequences of their action.
Very well—the Labour Party should pay the consequences of breaking the law. The amount would come to £1½ million. If the Labour Party cannot raise


£1½ million to pay off the money which Clay Cross councillors and other councillors ought justly to pay to ratepayers in their particular boroughs. I can only say how sorry I am that this great Labour Party is unable to face up to its responsibilities. After all, the Labour Party received £10 million back under another piece of legislation—[Interruption.]—and that was £10 million to which it was not lawfully entitled. It went back to the unions. [Interruption.]

Mr. Deputy Speaker: Order. The hon. Gentleman must relate his remarks to what is in the Bill. He is going very wide of the mark.

Mr. Lawrence: I am relating my remarks, Mr. Deputy Speaker—I say this with great respect—in the same way as the Secretary of State related his remarks when he said that there was no clean solution. I am suggesting the clean and just solution, which is that the Labour Party should pay back the losses occasioned by the breach of the law.
I ask Labour Members, to whom justice is so important: where is the justice in making a sacrifice for one's principles and expecting others to pay for them? If one is a person who wants to become a martyr to one's principles, one should face up to one's responsibilities and pay for them. Where is the honour of the great British Labour Party when it refuses to face up to its responsibilities in this matter? If Labour Members have any honour they should show it by voting against the Third Reading of the Bill.

10.33 p.m.

Mr. George Cunningham: Just in case my point has been missed, in the light of the speech that we have just heard it is worth reiterating that at present British central Government public funds are carrying a burden of approximately £100,000 sustained in the form of compensation payments made to certain individuals in Northern Ireland as a result of the wrongful and illegal actions of the former Secretary of State for Defence, Lord Carrington. [Interruption.]

Mr. Deputy Speaker: The hon. Gentleman is also straying from what is in the Bill. We must stick to what is in the Bill.

Mr. Cunningham: I am suggesting, Mr. Deputy Speaker, that when we are proposing to exonerate certain people from the financial consequences of their actions, it is relevant to recall that, without any opposition then from hon. Members who are now on the Opposition side of the House, one former Minister, Lord Carrington, was responsible for imposing upon public funds a burden of £100,000, which is now having to be—[Interruption.]

Mr. Deputy Speaker: Order. It is improper to refer to a member of another place in such terms unless on a substantive motion. The hon. Gentleman is straying very wide of what is in the Bill. Will he confine his remarks to the content of the Bill.

Mr. Cunningham: It is a very wide discussion, but it is very relevant, and I have done, Mr. Deputy Speaker.
In view of the expression of opinion about the need for rectitude in this matter, about which we have heard so much during these debates, I hope that the Opposition will now invite Lord Carrington to make some provision towards the £100,000, which otherwise falls on the taxpayer.

10.35 p.m.

Mr. Geoffrey Finsberg: I am one of the few Members who were members of a local authority which, if the district auditor does his job quickly, will be surcharged in excess of a quarter of a million pounds. This is the London borough of Camden. At the relevant date there were two Members of this House who were members of that authority. I was one and the hon. Member for St. Pancras, North (Mr. Stallard) was the other. Both of us voted on the same side, in favour of obeying the law.
It is important that something should be said, because the speech of the Secretary of State seemed to indicate that he was scrabbling around to try to find the tiniest possible precedent which could salve his conscience, and I do not believe that the precedents he quoted have anything to do with the particular cases.
The borough of Camden had a very clear warning in writing on two occasions from its chief officer of the consequences if it failed to comply with the law. Despite this. 11 or 12 members


decided to flout the law. One of them is now an hon. Member of this House.
I hope very much that the citizens of Camden will realise what is being done to them by this Government. There is nothing in detail in the Labour Party election manifesto that I can find saying that it was going to introduce legislation of this type in such detail. I hope, therefore, that we have not heard the last of this. There are other bastions of democracy in this country.
The present leader of the Labour Party on the Camden Borough Council—due to be surcharged, as the hon. Member said, to the extent of £250,000-plus; we do not know the full amount—less than a month ago said this:
We knew perfectly well what we were doing at the time and we have not asked for any special treatment".
It is because I believe that those are words which should be listened to that I hope the House will refuse to give a Third Reading to this Bill, and that those hon. and right hon. Members who tabled certain amendments will this time be prepared to back their names on the Order Paper with their votes.

10.38 p.m.

Mr. Percival: Right to the very last the Secretary of State has persisted in this fatuous argument that Neville Chamberlain said that his object was to "wipe the slate clean" and that that is what the Government are doing.
I remind the House, as the Committee were reminded several times, that what Neville Chamberlain said was this:
… when anyone is introducing a gradual change in procedure which brings into operation a completely new method of dealing with these troubles in the future, one might fairly take the opportunity of wiping the slate clean as far as the past is concerned …"—[Official Report, 15th June 1927; Vol. 207, c. 1033.]
This Bill introduces nothing so far as the future is concerned. It is merely letting off the very people whom the Act of 1927 was designed to take out of public life.
My hon. Friend the Member for Hampstead (Mr. Finsberg) has just said that the Secretary of State, right to the last, has been scrabbling around for precedents. Worst than that, he has been scrabbling around for every nasty thing he could say. At the end of his speech he made a scurrilous attack on my hon. and

learned Friend the Member for Wimbledon (Sir M. Havers) [Interruption.] I do not expect Government supporters to like this.
I was not aware that the Attorney-General had made any such complaint, though he spoke immediately after the speech to which the Secretary of State referred. Further, I understand that, contrary to all conventions of this House, that speech was made without any notice to my hon. and learned Friend. Perhaps the Minister would like to listen. The attack was as discreditable to the Secretary of State as the Bill which he now commends to this House. It is an evil Bill. It disgraces all who support it for the very reasons given by my hon. and learned Friend the Member for Wimbledon in his Second Reading speech, of which the Secretary of State complains.

The Minister for Housing and Construction (Mr. Reginald Freeson): A shoddy speech.

Mr. Percival: There was never a time when it was more important for this House to give a lead to the country. [Interruption.] I am afraid that the Minister for Housing and Construction is giving a very poor lead to it in the way that he is behaving now.
There was never a time when it was more important for us to make it clear that we expect all persons in authority, from ourselves downwards, to observe the law, and I need not spell out the reasons for that because they were spelt out clearly and cogently by my hon. and learned Friend the Member for Wimbledon in the speech which the Secretary of State criticised.
If we pass this Bill, it will be, to borrow the words of Mr. Levin—[Interruption.] I did not think that Government supporters would like that, either. It will be
… to proclaim that those who spit upon the law may do so with impunity provided that they do so in a sectional political interest.
Are there not sufficient Members in this House who put principle above politics to defeat the Third Reading of the Bill? Now is the time for all to stand up and be counted. I hope that we can now vote upon the Third Reading motion and defeat the Bill.

10.41 p.m.

Mr. Kaufman: If the hon. and learned Member for Southport (Mr. Percival) wishes to cite as one of his co-belligerents a champion of ex-President Nixon and ex-Vice-President Agnew, he is welcome to him. He referred to what he called "the scurrilous little attack" allegedly made by the Secretary of State, and the hon. Member for Burton (Mr. Lawrence) said that my right hon. Friend had made "a nasty little attack". Those who are supported by such speeches as that made earlier by the hon. and learned Member for Dover and Deal (Mr. Rees) are experts in scurrilous little attacks.
The Secretary of State intended no discourtesy to the hon. and learned Member for Wimbledon (Sir M. Havers) in referring to him and in asking him to withdraw an attack which he had made on my right hon. and learned Friend the Attorney-General. He did not do so wilfully in the hon. and learned Gentleman's absence. He had quite naturally assumed that the hon. and learned Gentleman, having wound up the Second Reading debate, would be present for the debate on a most crucial amendment on Report. It was for that reason alone that my right hon. Friend did not feel it necessary to send a note to the hon. and learned Gentleman. But that was simply an oversight, and there was no discourtesy intended.

Sir Michael Havers: I cannot believe that it was not known who was to wind up the Third Reading debate on behalf of the Opposition. I took great care to inform the Attorney-General a week before I wound up the Second Reading debate that I should have to make the attack that I did. I also went so far as to say to him that if the day of that debate was not changed, as it was eventually, I would explain to the House that the right hon. and learned Gentleman's absence was totally justified because he was carrying out a task in the European Court which had to be done.
I have been in this House all day. It has never been suspected that I should make any speech on Report or in this Third Reading debate. It would have been very simple for the Secretary of State or anyone else to give me warning before making the attack. I regret very much that that was not done.

Mr. Kaufman: I have already explained that my right hon. Friend omitted to inform the hon. and learned Member for Wimbledon by an oversight which is to be regretted. At the same time, it was to be expected that the hon. and learned Gentleman, who wound up the Second Reading debate and was in the purlieus of this House, would be present in the Chamber while the Bill was being debated. [Interruption.] If it justified the kind of intemperate remarks—[Interruption.]

Mr. Deputy Speaker: Order. I think it would be for the good of the House as a whole if we returned to the subject matter of the Bill.

Mr. Kaufman: Willingiy, Mr. Deputy Speaker. It is the Opposition who, throughout the passage of the Bill, have dealt in personalities and not in issues.
The hon. Member for Aylesbury (Mr. Raison), in his Third Reading speech, denied the contention of my right hon. Friend the Secretary of State that the gap between us was not wide but was a gap of method and timing, not of principle. Since he continues to deny that, I suggest that he reads in the Official Report tomorrow a speech made earlier today by his hon. and learned Friend the Member for Southport, who said that in the particular circumstances there might be a case to deal with the particular situation in a particular way. The hon. and learned Gentleman was saying that the situation required special action.
We have introduced special action through the Bill. The Opposition amendments have been designed to alter the method and timing, and have not affected the principle of the Bill. The hon. and learned Gentleman can read his own words on the matter.

Mr. Percival: Has the hon. Gentleman already forgotten that this afternoon I again pointed out, as I have done so many times before, that there is a fundamental difference of approach between us and the Government? If any evidence were needed, one has only to see the difference between the Bill with our proposed new Clause 1 and without it. The hon. Gentleman's argument is fatuous.

Mr. Deputy Speaker: Order. I must remind the House that we must stick to the content of the Bill as it now is.

Mr. Kaufman: I leave the House to judge when hon. Members have read the hon. and learned Gentleman's words.
The hon. Member for Aylesbury implied in his final speech that in introducing the Bill we were in some way attempting to subvert the sovereignty of

Parliament. We are asking Parliament to exercise its sovereignty to wipe the slate clean and put this episode behind us. I call upon the House to give the Bill its Third Reading and uphold the sovereignty of Parliament.

Question put, That the Bill be now read the Third time:—

The House divided: Ayes 251, Noes 235.

Division No. 207.]
AYES
[10.48 p.m.


Archer, Peter
Edwards, Robert (Wolv SE)
McElhone, Frank


Armstrong, Ernest
Ellis, John (Brigg &amp; Scun)
MacFarquhar, Roderick


Ashley, Jack
English, Michael
Mackenzie, Gregor


Ashton, Joe
Ennals, David
Maclennan, Robert


Atkins, Ronald (Preston N.)
Evans, Gwynfor (Carmarthen)
McMillan, Tom (Glasgow C.)


Atkinson, Norman
Evans, Ioan (Aberdare)
McNamara, Kevin


Bagier, Gordon A. T.
Evans, John (Newton)
Madden, Max


Barnett, Guy (Greenwich)
Ewing, Harry (Stirling)
Mahon, Simon


Barnett, Rt. Hon. Joel (Heywood)
Fitt, Gerard (Belfast W.)
Mallalieu, J. P. W.


Bates, Alf
Flannery, Martin
Marks, Kenneth


Bean, R. E.
Fletcher, Raymond (Ilkeston)
Marquand, David


Bennett, Andrew (Stockport N.)
Fletcher, Ted (Darlington)
Marshall, Dr. Edmund (Goole)


Bidwell, Sydney
Foot, Rt. Hon. Michael
Marshall, Jim (Leicester S.)


Bishop, E. S.
Ford, Ben
Mason, Rt. Hon. Roy


Blenkinsop, Arthur
Forrester, John
Maynard, Miss Joan


Boardman, H.
Fowler, Gerald (The Wrekin)
Meacher, Michael


Booth, Albert
Fraser, John (Lambeth, N'w'd)
Mellish, Rt. Hon. Robert


Bottomley, Rt. Hon. Arthur
Freeson, Reginald
Millan, Bruce


Bray, Dr. Jeremy
Garrett, John (Norwich S.)
Mitchell, R. C. (Solon, Itchen)


Brown, Hugh D. (Provan)
Garrett, W. E. (Wallsend)
Molloy, William


Brown, Robert C. (Newcastle W.)
George, Bruce
Morris, Alfred (Wythenshawe)


Buchanan, Richard
Ginsburg, David
Morris, Charles R. (Openshaw)


Butler, Mrs. Joyce (Wood Green)
Golding, John
Morris, Rt. Hon. J. (Aberavon)


Callaghan, Rt. Hon. J. (Cardiff SE)
Gould, Bryan
Moyle, Roland


Callaghan, Jim (Middleton &amp; P.)
Gourlay, Harry
Mulley, Rt. Hon. Frederick


Campbell, Ian
Graham, Ted
Murray, Rt. Hon. Ronald King


Canavan, Dennis
Grant, John (Islington C.)
Newens, Stanley


Cant, R. B.
Grocott, Bruce
Noble, Mike


Carter, Ray
Hardy, Peter
Oakes, Gordon


Carter-Jones, Lewis
Harper, Joseph
O'Halloran, Michael


Cartwright, John
Harrison, Walter (Wakefield)
O'Malley, Rt. Hon. Brian


Castle, Rt. Hon. Barbara
Hattersley, Rt. Hon. Roy
Ovenden, John


Clemitson, Ivor
Hatton, Frank
Owen, Dr. David


Cocks, Michael (Bristol S.)
Hayman, Mrs. Helene
Palmer, Arthur


Coleman, Donald
Healey, Rt. Hon. Denis
Park, George


Concannon, J. D.
Healey, Frank
Parker, John


Conlan, Bernard
Horam, John
Parry, Robert


Cook, Robin F. (Edin C.)
Howell, Denis (B'ham, Sm H.)
Pendry, Tom


Corbett, Robin
Hoyle, Doug (Nelson)
Perry, Ernest


Craigen, J. M. (Maryhill)
Hughes, Rt. Hon. C. (Anglesey)
Phipps, Dr. Colin


Crosland, Rt. Hon. Anthony
Hughes, Mark (Durham)
Prentice, Rt. Hon. Reg


Cryer, Bob
Hughes, Robert (Aberdeen N.)
Prescott, John


Cunningham, G. (Islington S.)
Hughes, Roy (Newport)
Price, C. (Lewisham W.)


Cunningham, Dr. J. (Whiteh)
Hunter, Adam
Price, William (Rugby)


Dalyell, Tam
Jackson, Colin (Brighouse)
Radice, Giles


Davidson, Arthur
Jackson, Miss Margaret (Lincoln)
Rees, Rt. Hon. Merlyn (Leeds S.)


Davies, Bryan (Enfield N.)
Janner, Greville
Richardson, Miss Jo


Davies, Denzil (Llanelli)
Jeger, Mrs. Lena
Roberts, Albert (Normanton)


Davies, Ifor (Gower)
Jenkins, Hugh (Putney)
Roberts, Gwilym (Cannock)


Davis, Clinton (Hackney C.)
John, Brynmor
Robertson, John (Paisley)


Deakins, Eric
Jones, Alec (Rhondda)
Roderick, Caerwyn


Dean, Joseph (Leeds West)
Jones, Barry (East Flint)
Rodgers, George (Chorley)


de Freitas, Rt. Hon. Sir Geoffrey
Jones, Dan (Burnley)
Rodgers, William (Stockton)


Delargy, Hugh
Kaufman, Gerald
Rooker, J. W.


Dell, Rt. Hon. Edmund
Kerr, Russell
Roper, John


Doig, Peter
Kilroy-Silk, Robert
Rose, Paul B.


Dormand, J. D.
Lambie, David
Ross, Rt. Hon. W. (Kilmarnock)


Douglas-Mann, Bruce
Lamborn, Harry
Rowlands, Ted


Duffy, A. E. P.
Lamond, James
Ryman, John


Dunn, James A.
Leadbitter, Ted
Sandelson, Neville


Dunnett, Jack
Lee, John
Sedgemore, Brian


Dunwoody, Mrs. Gwyneth
Litterick, Tom
Selby, Harry


Eadie, Alex
Lomas, Kenneth
Shaw, Arnold (Ilford South)


Edelman, Maurice
Lyon, Alexander (York)
Sheldon, Robert (Ashton-u-Lyne)


Edge, Geoff
Mabon, Dr. J. Dickson
Shore, Rt. Hon. Peter




Short, Rt. Hon. E. (Newcastle C.)
Thomas, Mike (Newcastle E.)
White, Frank R. (Bury)


Short, Mrs. Renée (Wolv NE)
Thomas, Ron (Bristol NW)
White, James (Pollok)


Silkin, Rt. Hon. John (Deptford)
Thorne, Stan (Preston South)
Whitehead, Phillip


Silkin, Rt. Hon. S. C. (Dulwich)
Tierney, Sydney
Whitlock, William


Sillars, James
Tinn, James
Willey, Rt. Hon. Frederick


Silverman, Julius
Tomlinson, John
Williams, Alan (Swansea W.)


Skinner, Dennis
Tomney, Frank
Williams, Alan Lee (Hornch'ch)


Small, William
Torney, Tom
Williams, W. T. (Warrington)


Smith, John (N Lanarkshire)
Urwin, T. W.
Wilson, Alexander (Hamilton)


Snape, Peter
Varley, Rt. Hon. Eric G.
Wilson, Rt. Hon. H. (Huyton)


Spearing, Nigel
Wainwright, Edwin (Dearne V.)
Wilson, William (Coventry SE)


Stallard, A. W.
Walden, Brian (B'ham, L'dyw'd)
Wise, Mrs. Audrey


Stewart, Rt. Hon. M. (Fulham)
Walker, Harold (Doncaster)
Woodall, Alec


Stoddart, David
Walker, Terry (Kingswood)
Woof, Robert


Stott, Roger
Ward, Michael
Wrigglesworth, Ian


Strang, Gavin
Watkins, David
Young, David (Bolton E.)


Summerskill, Hon. Dr. Shirley
Watkinson, John



Swain, Thomas
Weetch, Ken
TELLERS FOR THE AYES:


Taylor, Mrs. Ann (Bolton W.)
Weitzman, David
Mr. James Hamilton and


Thomas, Jeffrey (Abertillery)
Wellbeloved, James
Mr. Thomas Cox




NOES


Adley, Robert
Fowler, Norman (Sutton C'f'd)
Lawrence, Ivan


Aitken, Jonathan
Fox, Marcus
Lawson, Nigel


Alison, Michael
Fraser, Rt. Hon. H. (Stafford &amp; St)
Lester, Jim (Beeston)


Amery, Rt. Hon. Julian
Fry, Peter
Lewis, Kenneth (Rutland)


Arnold, Tom
Galbraith, Hon. T. G. D.
Lloyd, Ian


Atkins, Rt. Hon. H. (Spelthorne)
Gardner, Edward (S Fylde)
Loveridge, John


Awdry, Daniel
Gilmour, Rt. Hon. Ian (Chesham)
Luce, Richard


Banks, Robert
Gilmour, Sir John (East Fife)
McAdden, Sir Stephen


Beith, A. J.
Glyn, Dr. Alan
McCrindle, Robert


Bell, Ronald
Godber, Rt. Hon. Joseph
Macfarlane, Neil


Bennett, Sir Frederic (Torbay)
Goodhart, Philip
MacGregor, John


Benyon, W.
Goodhew, Victor
Macmillan, Rt. Hon. M. (Farnham)


Berry, Hon. Anthony
Goodlad, Alastair
McNair-Wilson, M. (Newbury)


Biffen, John
Gorst, John
McNair-Wilson, P. (New Forest)


Biggs-Davison, John
Gow, Ian (Eastbourne)
Madel, David


Body, Richard
Gower, Sir Raymond (Barry)
Marshall, Michael (Arundel)


Boscawen, Hon. Robert
Grant, Anthony (Harrow C.)
Mates, Michael


Bowden, A. (Brighton, Kemptown)
Gray, Hamish
Mather, Carol


Boyson, Dr. Rhodes (Brent)
Griffiths, Eldon
Maude, Angus


Braine, Sir Bernard
Grimond, Rt. Hon. J.
Maudling, Rt. Hon. Reginald


Brittan, Leon
Grist, Ian
Maxwell-Hyslop, Robin


Brotherton, Michael
Hall, Sir John
Mayhew, Patrick


Brown, Sir Edward (Bath)
Hall-Davis, A. G. F.
Miller, Hal (Bromsgrove)


Bryan, Sir Paul
Hamilton, Michael (Salisbury)
Miscampbell, Norman


Buck, Antony
Hampson, Dr. Keith
Moate, Roger


Budgen, Nick
Hannam, John
Monro, Hector


Bulmer, Esmond
Harvie Anderson, Rt. Hon. Miss
Montgomery, Fergus


Burden, F. A.
Hastings, Stephen
Moore, John (Croydon C.)


Butler, Adam (Bosworth)
Havers, Sir Michael
More, Jasper (Ludlow)


Carlisle, Mark
Hayhoe, Barney
Morgan, Geraint


Chalker, Mrs. Lynda
Heseltine, Michael
Morgan-Giles, Rear-Admiral


Channon, Paul
Hicks, Robert
Morris, Michael (Northampton S.)


Churchill, W. S.
Higgins, Terence L.
Morrison, Charles (Devizes)


Clark, Alan (Plymouth, Sutton)
Holland, Philip
Morrison, Hon. Peter (Chester)


Clark, William (Croydon S.)
Hordern, Peter
Mudd, David


Clarke, Kenneth (Rushcliffe)
Howe, Rt. Hon. Sir Geoffrey
Heave, Airey


Clegg, Walter
Howell, David (Guildford)
Nelson, Anthony


Cockcroft, John
Hunt, John
Neubert, Michael


Cooke, Robert (Bristol W.)
Hurd, Douglas
Newton, Tony


Cope, John
Hutchison, Michael Clark
Nott, John


Cordle, John H.
Irvine, Bryant Godman (Rye)
Onslow, Cranley


Cormack, Patrick
Irving, Charles (Cheltenham)
Oppenheim, Mrs. Sally


Costain, A. P.
James, David
Osborn, John


Critchley, Julian
Jenkin, Rt. Hon. P. (Wanst'd &amp; W'df'd)
Page, John (Harrow West)


Crouch, David
Jessel, Toby
Page, Rt. Hon. R. Graham (Crosby)


Crowder, F. P.
Johnson Smith, G. (E Grinstead)
Pardoe, John


Dodsworth, Geoffrey
Jones, Arthur (Daventry)
Pattie, Geoffrey


Douglas-Hamilton, Lord James
Jopling, Michael
Penhaligon, David


Drayson, Burnaby
Joseph, Rt. Hon. Sir Keith
Percival, Ian


du Cann, Rt. Hon. Edward
Kaberry, Sir Donald
Pink, R. Bonner


Durant, Tony
Kellett-Bowman, Mrs. Elaine
Prior, Rt. Hon. James


Eden, Rt. Hon. Sir John
Kershaw, Anthony
Raison, Timothy


Edwards, Nicholas (Pembroke)
Kilfedder, James
Rathbone, Tim


Elliott, Sir William
King, Evelyn (South Dorset)
Rees, Peter (Dover &amp; Deal)


Emery, Peter
King, Tom (Bridgwater)
Rees-Davies, W. R.


Eyre, Reginald
Kitson, Sir Timothy
Renton, Rt. Hon. Sir D. (Hunts)


Fairbairn, Nicholas
Knight, Mrs. Jill
Renton, Tim (Mid-Sussex)


Fairgrieve, Russell
Knox, David
Ridley, Hon. Nicholas


Finsberg, Geoffrey
Lane, David
Ridsdale, Julian


Fisher, Sir Nigel
Langford-Holt, Sir John
Rifkind, Malcolm


Fookes, Miss Janet
Latham, Michael (Melton)
Roberts, Wyn (Conway)







Rodgers, Sir John (Sevenoaks)
Spicer, Jim (W Dorset)
Tugendhat, Christopher


Ross, Stephen (Isle of Wight)
Spicer, Michael (S Worcester)
van Straubenzee, W. R.


Rossi, Hugh (Hornsey)
Sproat, Iain
Vaughan, Dr. Gerard


Royle, Sir Anthony
Stainton, Keith
Viggers, Peter


Sainsbury, Tim
Stanbrook, Ivor
Wakeham, John


St. John-Stevas, Norman
Stanley, John
Walker, Rt. Hon. P. (Worcester)


Shaw, Giles (Pudsey)
Steen, Anthony (Wavertree)
Wall, Patrick


Shaw, Michael (Scarborough)
Stewart, Ian (Hitchin)
Walters, Dennis


Shelton, William (Streatham)
Stokes, John
Warren, Kenneth


Shepherd, Colin
Stradling Thomas, J.
Weatherill, Bernard


Shersby, Michael
Tapsell, Peter
Whitelaw, Rt. Hon. William


Silvester, Fred
Taylor, R. (Croydon NW)
Wiggin, Jerry


Sims, Roger
Tebbit, Norman
Winterton, Nicholas


Sinclair, Sir George
Temple-Morris, Peter
Young, Sir G. (Ealing, Acton)


Skeet, T. H. H.
Thatcher, Rt. Hon. Margaret



Smith, Cyril (Rochdale)
Thomas, Rt. Hon. P. (Hendon S.)
TELLERS FOR THE NOES:


Smith, Dudley (Warwick)
Thorpe, Rt. Hon. Jeremy (N Devon)
Mr. Cecil Parkinson and


Speed, Keith
Townsend, Cyril D.
Mr. Spencer Le Marchant.


Spence, John
Trotter, Neville

Question accordingly agreed to.

Bill read the Third time and passed.

ADJOURNMENT

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Harper.]

Orders of the Day — STEEL INDUSTRY (WALES)

11.1 p.m.

Mr. Roy Hughes: I am glad to have the opportunity of this adjournment debate on the prospects for the steel industry in Wales. It can be said, without question, that those prospects are bleak at present.
It is my contention that there should have been a full debate on the steel industry in the House, for the situation in the country in this vital industry is tragic, particularly in Wales, where it is the biggest employer of labour. The industry is also an important part of the economy in Scotland. The livelihoods of many thousands of families are involved and whole communities are at stake. I therefore feel that a full-scale debate should have been given the highest priority, for neglect of this kind leads to the call for separatism in respect of Wales and Scotland, as the Member for Carmarthen (Mr. Evans) would be only too pleased to agree.
There are 64,000 people employed in the steel industry of Wales, and in the 10-year modernisation plan announced during the term of office of the last Government three major plants in Wales were to be adversely affected.
The Labour Party promised in its election manifestos of February and October

last year that it would reconsider those closure proposals. In the event, the decision over East Moors, Cardiff, has been postponed for five years, until 1980. A decision on the future of Shotton has not been reached. In respect of Ebbw Vale, the decision was confirmed that steel making there was to end. For the people of Ebbw Vale and those employed in the steel works, there has been much heart searching and it is very tragic for them.
Now, in addition to, and superimposed on, that decision to cut steel making, we have a major recession in the economy which particularly affects the steel industry.
The Chairman of the British Steel Corporation has now proposed, in addition to his earlier proposals, to lay off over 9,000 people in the Welsh steel industry. The consequences of such a proposal would certainly be disastrous not only for the steel industry but for industries serving it and for distributive and service sectors. Whole communities could be left derelict. The trade unions have flatly rejected those proposals by Sir Monty Finniston. Perhaps the unions would do well to press for short-time working rather than redundancies. Half a loaf is better than no bread. There could be complications over the guaranteed week which previously operated in the industry.
The community in Ebbw Vale, which is facing a terrible situation, recently had the advice of the Leader of the Liberal Party, who emphasised the remarkable redundancy payments they would get under Common Market rules if they lost their jobs. I do not know how experienced the right hon. Gentleman is in the affairs of the steel industry, but the people of Ebbw Vale and of Wales as a whole want work, not redundancy payments. It


is wrong to stress redundancy payments when these people want the dignity of secure employment.
The steel industry is subject to violent fluctuations of demand. The BSC could be accused of hasty judgments over closures. For instance, it closed the former Stewarts and Lloyds tube works in my constituency, with the loss of 1,500 jobs. We now import the very product that the works produced, with evil effects on our precarious balance of payments.
After I wrote to Lord Beswick on this matter, in a letter dated 9th May he replied:
As far as tubes are concerned, the Corporation has run into a number of production problems at Clydesdale, where output of seamless steel is concentrated.
It was those production problems that the action committee at Stewarts and Lloyds works in Newport stressed when it protested against the closure decision. It said that this had been a long and consistent problem at that works in Scotland. It put this fact before the Select Committee on Nationalised Industries both in the House and when it visited Newport. This was therefore a case of hasty judgment by the corporation.
Some weeks ago the commercial director of the corporation Mr. Hawksley, pointed out that for every ton of steel exported to the Continent, 17 tons were imported, Germany being the main beneficiary of this trade. It had been known that this would happen if we joined the EEC, and now the cat is out of the bag—

Mr. John Page: Does the hon. Member agree that if we were to join EFTA on coming out of the EEC all these regulations would remain exactly the same? If there was a "No" vote, would the hon. Member be against an EFTA-type agreement?

Mr. Hughes: These documents were drawn up by the staff of the BSC in 1971 before we entered the Common Market, so the situation did not arise at that time. The first was entitled "The British Steel Corporation and the Common Market", the second "The Effects on the Direct Steel Trade of UK Entry", and the third "The Effects on the Indirect Steel Trade of U.K. Entry". They revealed that our steel industry, which

had just begun to modernise after years of neglect by the old steelmasters, would lose its markets to continental steel makers. This prediction has been shown to be accurate. We now import no less than 3 million tons annually from the Continent. It has been suggested that if those 3 million tons were made in this country we should require 30,000 more people in the industry, not 20,000 fewer, as the Chairman of the BSC is now proposing.

Mr. Brian Sedgemore: Does my hon. Friend agree that it is a matter not of 3 million tons coming in but of a 3 million tons net deficit of imports over exports.

Mr. Hughes: I accept that correction. These figures bring home to ordinary steel workers and their families what Common Market membership means to them. It is their jobs and livelihoods which are at stake. The documents revealed that with entry the BSC would be forced to concentrate its plants on the East Coast. It is this policy which is now forcing the closure of our Welsh steel works in Ebbw Vale. Shotton and East Moors. That applies to works elsewhere in the country, too. EEC membership is the road to ruin for the Welsh steel workers and their families, and for whole communities in the Principality.
I suggest that the documents must be published. The people should be told the truth so that they can judge accordingly. The veil should be lifted from these documents which have previously been kept secret. My right hon. Friend the Secretary of State for Industry has been quite straight over these issues. He pointed out in Barnsley last Saturday, for instance, that control of the publicly-owned steel industry is passing to Europe. Is that what the British people want? I very much doubt whether that is their wish.
Article 58 of the Treaty of Paris reads:
if a situation of manifest crisis is declared when there is a decline in demand the Community is empowered to order a cutback in production.
Last week the French Government apparently asked the Community to accept that there was such a crisis, but the request was refused. The suggestion has been made that that was because of the


referendum in Britain. I appreciate that information of that kind is embarrassing at the moment to supporters of the Common Market.
It is further alleged by my hon. Friend the Member for Liverpool, Walton (Mr. Heffer), the former Minister of State, Department of Industry, that the Commissioners were having secret talks, as he put it, with certain pro-Market Ministers to hush up the details and to avoid any redundancies in our Welsh steel industry and elsewhere until the United Kingdom is safely tucked inside the Common Market. That has been denied, but the fact is that the information that my hon. Friend has divulged is from the Agence Europe. It will suffice to say that there is something very fishy about the whole business.
Then there is all this business about Sir Montague Finniston. His flights of fancy have spread despondency and alarm throughout the industry. A few weeks ago he alleged that he was misquoted over some statement about the possibility of selling off certain parts of the publicly owned steel industry to private concerns. But a fortnight ago we had that remarkable statement envisaging that the British Steel Corporation's part of the steel industry would have its manpower reduced from 220,000 to 50,000. That might be said to be "At-a-stroke" Government.
Of course, our situation is different from that which prevails in Japan. I understand that in Japan there is casual contract labour in addition to the normal regular work force. Further, when young lads start in the steel industry in Japan at the age of 16 they are guaranteed a job for life.
I protested about Sir Montague Finniston's statement to the Secretary of State for Industry, and on 12th May my right hon. Friend replied to me:
I was most concerned both about the content of the statements and the manner in which they were made …".
That goes, too, for many thousands of steel workers and their families.
That brings into question the whole relationship between the Government and our nationalised industries. I recall what happened when the Conservatives came to power in 1970. Soon, there was disagreement over policy with Lord Hall,

the head of the Post Office, and he was out. But Sir Monty Finneston has acted far more irresponsibly. All he had was a questionnaire from the Secretary of State for Industry. The Chairman of the BSC needs to be reminded of the 20-year argument over the public ownership of our steel industry. He is running a publicly-owned industry, not a private company. Ultimately, the Government are responsible for it through the House.
My hon. Friend the Member for Motherwell and Wishaw (Dr. Bray) has tabled Early-Day Motion No. 468 on the subject of the steel industry. My hon. Friend has considerable experience in the management of private industry. The original steel project of the Macmillan Government, instead of being sited on one site, was split between Ravenscraig in Motherwell and the Spencer works in Newport, so my hon. Friend and I have a kinship in that respect.
In that motion my hon. Friend states that under the Iron and Steel Act 1967 the BSC should show concern for all its employees—the 220,000 present employees not the 50,000 to which they may be reduced at some future date. He wants the industry to be able to engage in any industrial or commercial activity inside or outside the steel industry. He points to the acute management problems of the BSC and states that industrial relations have deteriorated. I can certainly vouch for that in my area. My hon. Friend states that staff development policies are inadequate and that steel workers and managers are demoralised. He says that major operating mishaps in plants occur with unjustifiable frequency and that the failure of strategy is manifest at the highest level. I can confirm this from my experience at Newport. There is much more besides.
The gentleman who runs this industry has been given a knighthood for this squalid display of inefficiency. I attended the annual meeting last weekend of the Welsh Regional Council of Labour at Llandudno. At that meeting it was accepted that a new chairman should be appointed without further delay. That is also the view of the Welsh TUC. There will be no tears in the steel industry if Sir Monty Finneston resigns.
It will not be an easy job to put the BSC back on its feet. It needs a man of


ability at its head with a belief in public ownership. It needs, too, worker participation in the proper sense, not the present sham arrangement of "Finneston's poodles". The Government must face the fact that this nationalised industry has not come up to expectations in respect of management, accountability, efficiency or industrial relations. Serious thought needs to be given to this matter because the steel industry is vital to the Welsh economy.

11.25 p.m.

The Under-Secretary of State for Industry (Mr. Michael Meacher): I welcome the opportunity offered by my hon. Friend the Member for Newport (Mr. Hughes) to debate the serious and important issues facing the Welsh steel industry.
I begin with the proposals for expansion at two Welsh sites within the five major sites selected under the strategy for main development. These are the proposals for expansion at Port Talbot and Llanwern, which would increase their steel-making capacity from about 8 million tons to about 10 million tons. Investment in Wales would amount to £900 million out of the total estimated cost of the programme of £3,000 million at 1972 prices.
The expansion at Llanwern from 2 million tons to about 3·8 million tons a year is almost complete, and new coke ovens and coke handling plant are to be built at Port Talbot. Proposals for further major expansion at Port Talbot are being considered under the procedures established for the appraisal of major investment projects.
Investment in finishing facilities in Wales includes £40 million for development of tinplate facilities at Ebbw Vale, and the British Steel Corporation plans to proceed with a further stage costing £8 million. At Shotton a cold production mill has been started, and work has begun on a £30 million coating complex.
The corporation's strategy proposed the complete closure of the East Moors works, of iron and steel making and hot rolling at Ebbw Vale, and Shotton. This meant a threatened loss of over 15,000 jobs in those three works alone. In the case of Ebbw Vale, 320 employees

were affected by the closure of one blast furnace in April, and the corporation has told the Government that no one who wanted alternative employment left the works without it. About 700 are likely to be displaced by closure of the second blast furnace and the BOS shop in July. These figures do not take account of 350 expected retirements. Everything possible is being done to attract alternative employment for these persons, but it is not possible at this stage to see jobs being provided for them all.
In the case of East Moors, the deferment of the closure means that the new jobs currently in prospect will arise too early to provide alternative employment. But at least we have more time to attract additional new projects. Cardiff has a number of advantages as a location for industry and was granted development area status last August. There is, therefore, reason to hope that we shall be able to secure sufficient new jobs to replace the 4,600 to be lost in steel.
In the case of Shotton, in addition to the deferment of the closure date it was concluded in the interim report that further study was needed of the economics of modernised steel-making at Shotton and of its implications for the corporation's proposals elsewhere. This study is in progress, and it is hoped that it will be completed within a few weeks. Work is going ahead on the development of new finishing plant which will provide 500 jobs.
As my hon. Friend initiated the debate. I should refer to the problem at Alpha Steel Ltd. at Newport. I make no secret of the fact that when the plans became known the Government regretted the loss of powers to control investment in the steel industry because of fears about the effect it would have on scrap supplies for the BSC. These powers were possessed before our accession to the EEC. My hon. Friend was active in supporting the project, and I am sure that the provision of employment—800 jobs are involved—will be welcomed in the area.
This, then, is the pattern of the industry for the longer term. However, it is now faced with problems in the short term as a result of the current recession. There has been a sharp fall in demand for steel, which has affected both


the corporation's level of production and its cash flow. Under legislation before the House—the Statutory Corporations (Financial Provisions) Bill—the Government are seeking to increase the corporation's borowing limit by £750 million. This should enable the corporation to deal with the cash flow situation and maintain the momentum of the capital investment programme. The corporation's most recent forecasts indicate that demand in the immediate future is likely to be equivalent to only about 70 per cent. of plant capability, but the fall in demand for some products is much more serious and the strip mills division, mainly located in Wales, has been particularly hard hit. It is reported to be losing about £2½ million a week.
In order to meet these problems, the corporation is trying by all possible means to maximise sales. It is increasing its own stocks and has put to the Government proposals for a counter-cyclical stockbuilding programme. We are sympathetic to this, but are still awaiting a reply from the corporation on the jobs that would be saved by the programme. It is concentrating production

also on low-cost plants and has put to the TUC steel committee proposals which would result in a reduction in employment of between 16,500 and 17,000 this year. The steel committee rejected this proposal and is considering the situation in preparation for a further meeting between it and the corporation which will take place on 19th May.
My hon. Friend will be aware of the situation surrounding the issue in the light of the publicity attending certain statements. I take this opportunity to say that the Government regret the statements made recently by Sir Monty Finniston and the manner in which they were made, which have caused great anxiety in the steel industry and in the communities in which the corporation's works are situated.

The Question having been proposed after Ten o'clock and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at twenty-nine minutes to Twelve o'clock.